March 24, 2007	Saturday	Rabi-ul-Awwal 4, 1428

LONDON, March 23: The dollar firmed against the euro but fell against the yen on Friday before the release of key housing data in the United States. The euro sagged to $1.3318 in early European trading, from $1.3328 late in New York on Thursday.

The dollar pulled back to 117.72 yen in European trade, from 118.07 yen late on Thursday.

Meanwhile on Friday, traders reduced their expectations of a near-term cut in American interest rates after the US Federal Reserve held American borrowing costs at 5.25pc on Wednesday.

Dealers said that after digesting the Fed's remarks Wednesday, the market view now was that the US central bank was unlikely to loosen its monetary policy any time soon, given lingering inflation concerns.

The dollar had fallen to a two-year low of 1.3411 against the euro after the Fed tweaked its policy statement in a move initially taken as a sign that it was laying the ground for a rate cut. Dealers later reconsidered that view.

“Market sentiment was that inflationary concerns remain, reducing speculation of a near-term rate cut, which led traders to actively buy the dollar,” said Yoshifumi Suzuki, forex dealer at Hachijuni Bank.

“But that is only a view that the market has of the situation. Traders have now readjusted their positions as they look ahead to (US) housing and GDP (gross domestic product) figures next week,” he added.

The euro was changing hands at $1.3318, against $1.3328 on Thursday, 156.81 yen (157.39), 0.6779 pounds (0.6787) and 1.6175 Swiss francs (1.6187).The dollar stood at 117.72 yen (118.07) and 1.2143 Swiss francs (1.2143).—AFP