Due to lack of latest economic data the U.S. Dollar remained steady against major currencies. The U.S. Producer Price Index data and the German ZEW survey will be released tomorrow, which will give investors some direction as to where the foreign exchange market is heading, but for now, all investors are on the side lines. More importantly, the data will provide investors with information regarding interest rates as they prepare for information from the next meeting of the European Central Bank and the U.S. Federal Reserve.
In early afternoon trading in Hong Kong (05:00 GMT), the U.S. Dollar traded at 104.00 Yen, down from 104.22 Yen, while the Euro traded at $1.5585, up from $1.5564.
The Federal Reserve has reduced interest rates by 325 basis points since September 2007, to a current level of 2%. However, the European Central Bank has maintained its rate at 4% since June 2007. Analysts expect the European Central Bank to keep interest rates steady throughout the remainder of this year in order to curb inflation, while at the same time, spur economic growth. According to the President of the European Central Bank, Jean-Claude Trichet, the Central Bank must be “extraordinarily attentive” to inflation.