LONDON, July 11: The euro rose against the dollar on Monday on news that Luxembourg had voted in favour of the European constitution, with nervousness ahead of US trade figures on Wednesday causing weakness in the dollar. In late-day trade, the euro was at $1.2066 against $1.2006 three hours earlier and $1.1970 on Friday. The dollar was quoted at 111.72 yen against 112.00 yen earlier in the day and 112.33 yen on Friday evening.
The small European state of Luxembourg voted in favour of the European constitution by a margin of 56.52 per cent to 43.48 on Sunday, offering some support to the euro after the rejection of the treaty by France and the Netherlands, analysts said.
Sentiment towards the euro “has improved since the Luxembourg vote”, said Tony Norfield, an economist at investment bank ABN Amro.
The dollar this week will be affected by US trade figures on Wednesday that will give the latest indication of the country’s commercial deficit.
Some analysts believe the data could put an end to the dollar’s rally against the euro.
The dollar began to fall on Friday after US jobs data showed fewer non-farm jobs had been created in June than expected.
“There seems to be a bout of profit-taking in the dollar at the moment, with payrolls acting as a catalyst,” said Mellor at the Bank of New York.
Elsewhere, the pound recovered against both the dollar and the euro, recouping much of the losses suffered at the end of last week when it fell sharply in the wake of Thursday’s terrorist attacks in London.
Monday a mixed set of British data, with trade figures worse than expected but house price numbers above forecasts.
Producer prices data showed that raw materials prices rose at their highest annual rate in over 20 years, but that output prices remained stable.
This suggests that manufacturers face a competitive pricing environment and are unable to pass on their higher production costs to consumers, analysts said.
On the London Bullion Market, the price of an ounce of gold stood at $424.20 against $424.40 late on Friday.—AFP
