January 3, 2003	Friday	Shawwal 29, 1423

LONDON, Jan 2: The dollar held steady against other leading currencies in thin trading on Thursday with little data or leads from Asia, where Japanese markets remained shut.

The single European currency traded at 1.0482 dollars from 1.0492 late on Tuesday in New York. Dealers around the globe took a break on Wednesday for New Year’s Day holiday.

The dollar also stood at 119 yen from 118.77 on Tuesday.

The single European currency ended 2002 at its highest point of the year at $1.0503 after breaking through significant long-term technical resistance levels, said ABN Amro analyst Rob Hayward.

This technical break is significant and suggests the likelihood of further upside towards $1.1000, he added.

The euro was unfazed by figures showing a drop in the euro zone’s purchasing managers’ index of business activity 48.4 in December from 49.5 in November, the fourth consecutive monthly decline.

A reading above 50 indicates that the manufacturing sector is generally expanding, while a reading below 50 suggests that it is generally contracting.

The PMI was pretty poor, said Bear Stearns analyst Steve Barrow, but added that European economic indicators were not the main factor influencing the euro exchange rate against the dollar.

Dealers were also mulling news that Danish Prime Minister Anders Fogh Rasmussen had indicated that Denmark could hold a referendum on joining the euro in 2004 or 2005.

British Prime Minister Tony Blair meanwhile kick-started the 2003 euro debate in his country by pushing the vexed issue back up the political agenda in his new year’s message.

Blair, whose Labour government has promised to decide by early June whether to hold a referedum on euro membership subject to five economic tests, said the issue was possibly Britain’s “single most important decision” in 2003.

Dealers in Europe were also digesting a report carried by Jiji Press from Tokyo that Japanese monetary authorities are ready to take action to curb sharp gains in the yen against the dollar.

The yen’s recent gain was mainly due to speculative moves based on recognition that it is difficult for Japanese authorities to intervene in the market during year-end and New Year holidays, an unnamed source at the finance ministry was quoted as saying.

But we are in a position to take action whenever necessary, the source said, adding that the Bank of Japan could intervene in New York or European markets while Tokyo markets are closed.

The euro was changing hands at $1.0482 from 1.0492 late on Tuesday in New York, 124.69 yen (124.63), 0.6517 pounds (0.6513) and 1.4519 Swiss francs (1.4498).

The dollar was being quoted at 119 yen (118.77), and 1.3856 Swiss francs (1.3817).

The pound was at 1.6078 dollars (1.61), 191.32 yen (191.26) and 2.2277 Swiss francs (2.2251).

On the London Bullion Market, the price of an ounce of gold eased to $345.55 from $348.50 on Tuesday. —AFP