LONDON, Nov 22: The dollar held steady against other leading currencies on Friday, supported by green shoots of recovery in the US economy which contrasted with the sluggish state of the euro zone and Japan, analysts said.

The single European currency traded at $1.0027 against 1.0017 late on Thursday in New York.

The dollar also stood at 122.60 yen from 122.62 on Thursday.

Market watchers said that a recent dollar downturn appeared to have petered out following recent gains by US stock markets and an improvement in US economic indicators.

There’s definite signs that the (US) economy’s picking up, said Barclays Capital currency strategist Jake Moore.

He said that an index of manufacturing activity in the mid-Atlantic region from the Philadelphia Federal Reserve Bank on Thursday had been “much, much higher than expected... indicating that the economy’s through the worst.”

Geopolitical concerns seem to have ebbed a bit with Iraq accepting the UN’s accord and there are increasing spotlights on Japan and Europe, and that’s taking the pressure off the US really, Moore added.

French data showed growth in the euro-zone’s second-biggest economy slowed in the third quarter of the year from the second, easing to 0.2 per cent from a rate of 0.4 per cent in the previous three-month period.

Against such a backdrop, doubts are growing as to whether the euro will be able to hold up above the one-dollar level.

Greater confidence in global growth prospects, improved risk appetite and an associated shift from bonds to equities should create a much more dollar-positive environment, said Steve Pearson, currency strategist at HBOS bank.

Economists say that expectations that the European Central Bank will slash euro-zone interest rates by up to 0.5 percentage points at the next scheduled monetary policy meeting on December 5 are also hurting the euro.

That would erode interest rate differentials between the euro-zone and the United States which have weighed on the dollar since the Federal Reserve’s last interest rate cut on November 6.

But other analysts point to swelling US current account and budget deficits as negative factors for the dollar.

The euro was changing hands at $1.0027 from 1.0017 late on Thursday in New York, 122.87 yen (122.85), 0.6333 pounds (0.6334) and 1.4712 Swiss francs (1.4696).

The dollar was being quoted at 122.60 yen (122.62) and 1.4676 Swiss francs (1.4669).

The pound was at 1.5825 dollars (1.5806), 194.00 yen (193.86) and 2.3243 Swiss francs (2.3191).

On the London Bullion Market, the price of an ounce of gold slipped to $318.15 from 318.85 late on Thursday. —AFP