The euro nudged ahead against the dollar in early deals today following last night's decision by the US Federal Reserve to hold interest rates. As expected, the Fed also retained its easing bias and reiterated once again that rates were unlikely to change for a considerable period of time. The dollar held steady after the decision with a surge in stocks providing support. At 0900, the euro was trading up at USD1.1178, while against sterling it was unchanged at STG0.7035 as the market awaits the Bank of England minutes, due for release later this morning.
Yesterday's higher than expected German ZEW index failed to underpin the euro, which subsequently slipped back below the USD1.12 level. Ignoring the ZEW, the market instead focussed on downbeat comments from the IMF, which said that the single currency was suffering an unfair share of the pain from a weaker dollar and this has hit the economic recovery. //www.fxcentre.com