LONDON, Dec 28: The euro neared $1.47 on Friday amid persistent speculation that poor US economic data could force the US Federal Reserve to cut rates in 2008, dealers said.

The greenback was also under pressure as traders reacted nervously to the assassination of Benazir Bhutto, while activity was muted with many investors away for year-end holidays, dealers said.

In early morning deals on Friday, the euro touched $1.4682, its highest level since Dece 13. It later stood at $1.4679, which compared with 1.4622 in New York late on Thursday.

Elsewhere Friday, the dollar fell to 113.23 yen, from 113.67 yen.

US economic data continues to disappoint the market with yesterday’s worse-than-expected durable goods orders for November adding further downside pressure to the greenback, said James Hughes, market analyst at CMC Markets.

Data released on Thursday showed that new orders for US durable goods rose just 0.1 per cent, barely reversing three months of consecutive declines and confounding forecasts for a 3.0 per cent rise.

The poor reading increases the likelihood that the Federal Reserve will need to cut interest rates further next year as it seeks to soothe the troubled US economy, dealers said. US borrowing costs stand currently at 4.25 per cent.

Thursday’s assassination of Bhutto and weaker-than-expected US data prompted market players to scale back risky “carry trades” that involve borrowing cheaply in countries like Japan to invest overseas.

There is an unwinding of carry trades. That is why the yen is higher, said Mark Wan, chief analyst at Hang Seng Investment Services Ltd.

In European trading on Friday, the euro changed hands at $1.4679, against 1.4622 late Thursday, at 166.19 yen (166.27), 0.7350 pounds (0.7326) and 1.6628 Swiss francs (1.6663).

The dollar stood at 113.23 yen (113.67) and 1.1326 Swiss francs (1.1392).

The pound was at $1.9977 (1.9954).

In London, the price of gold eased to $828.50 per ounce from $829 late on Thursday.—AFP