February 07, 2008	Thursday	Muharram 28, 1429

LONDON, Feb 6: The dollar rose against the euro on Wednesday despite growing fears of a US recession and ahead of European interest rate decisions, dealers said.

Analysts said the dollar was benefiting from its safe-haven reputation and from US investors pulling their money back home, even as US data continues to spark fears of a recession in the world’s biggest economy.

Another bout of selling on Asian stock markets on Wednesday appeared to have benefited the US currency.

“Price action suggests that episodes of equity-led risk aversion remain strongly beneficial for the dollar,” said Geoffrey Yu, forex analyst at UBS.

In late European trade on Wednesday, the euro fell to $1.4636 from $1.4645 in New York late on Tuesday.

Against the Japanese currency, the dollar climbed to 106.76 yen from 106.75.

Analysts said the focus of the market had switched to interest rate decisions by the Bank of England (BoE) and the European Central Bank (ECB) on Thursday.

The ECB is expected to leave interest rates on hold given that ECB president Jean-Claude Trichet continues to point to inflation worries in the eurozone.

Trichet’s statement on Thursday, following the decision, could contain hints the ECB will soften its stance in the months to come, they say.

The Bank of England is widely expected to cut interest rates by a quarter point to 5.25 per cent. In its accompanying statement, it is expected to continue to stress inflationary pressures as a reason for its moderate approach.

On the London Bullion Market, the price of gold rose to $903 an ounce from $887.50 late on Tuesday.—AFP