May 6, 2003	Tuesday	Rabi-ul-Awwal 3, 1424

PARIS, May 5: The euro fell slightly against the dollar in Europe on Monday in quiet trading before a meeting on interest rates on Tuesday by the US Federal Reserve and with London and Tokyo markets closed for holidays.

The euro, which has firmed strongly against the dollar in recent weeks, was being quoted at $1.1216 from $1.1215 earlier and $1.1226 here late on Friday.

The European currency slipped despite strength on the Paris and Frankfurt stock markets which might be seen as a factor attracting funds into the euro zone.

In Singapore the dollar had fallen against the yen on Monday on light profit taking and was being quoted at 118.98 yen from 119.11 yen in New York on Friday.

In Paris later the dollar was being quoted at 118.90 yen from 119.03 late on Friday.

Analysts in general expect the Federal Reserve to hold its key rates steady on expectations that the US economy will soon show signs of recovery despite some weak indicators recently.

Among factors said to have pulled the dollar downwards recently are twin US budget and trade deficits.

At CIC bank in Paris, markets experts Philippe Lamotte commented: It is very quiet. It is even rather surprising that a sharp rise on stock markets has not had a mechancial effect on the (forex) market.

Stock markets in Paris and Frankfurt were firm, each showing gesday and the European Central Bank is to meet on Thursday but financial markets expect little change in the way of monetary policy.

Lamott remarked: Investors don’t expect anything at all from the Fed or the ECB.

At DBS Bank in Singapore Lee Boon Keng said that decisions to hold rates steady had probably been factored in to prices on financial markets. The euro was likely to remain at about $1.12 this week unless the Fed sprang a surprise, he commented.

Sterling was being traded at $1.6050 from 1.6043 late on Friday, at 190.953 yen from 190.96 and at 2.1651 Swiss francs from 2.1555. —AFP