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FX round-up: Dollar mixed after sentiment report

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Date: Sunday 27 Apr 2008

LONDON (ShareCast) - The dollar was mixed on Friday but firmed against the euro and the yen despite a weaker than expected US consumer sentiment report and a rise in oil prices.

The report showed sentiment fell to its lowest level in over 25 years fuelling concern about the US economy.

The weak data boosted expectations that the Federal Reserve may continue its rate cutting policy while the European Central Bank is expected to keep rates unchanged amid inflationary concerns.

The Fed will decide this week whether to cut interest rates again. Expectations are for a 25 basis point cut to 2% although the central bank is not expected to cut rates any further.

Meanwhile the euro lost some support after Thursday’s disappointing German business confidence survey while data showing an unexpected decline in the number of Americans claiming jobless benefits helped strengthen the dollar.

Sterling hit a three-week high against the euro on Friday despite a raft of soft UK economic data. Weak euro zone data last week took the euro off its recent high against the dollar.

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