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To: maceng2 who wrote (534)	1/23/2004 5:24:39 AM
From: maceng2	Read Replies (1) \| Respond to of 1417

Euro continues gaining against the dollar By Ivar Simensen Published: January 22 2004 12:22 \| Last Updated: January 22 2004 18:09 news.ft.com The euro hit a one-week high against the dollar on Thursday after recent comments from European officials eased the market's concerns about direct intervention from the European Central Bank. Following last week's sharp correction, which took the dollar to a one-month high against the euro amid growing expectations that the ECB might intervene, the language used by European finance ministers and central bank members was more defensive this week. This has sent the euro up four cents against the dollar since Monday. In the monthly ECB bulletin, published on Thursday, the bank again expressed concern about "excessive" exchange rate moves. But the central bank said it would "continue to monitor carefully all developments" in the market. The absence of any mention of direct action left traders with the view that the ECB was not about to intervene. Meanwhile, in Davos, Jean-Philippe Cotis, the chief economist of the OECD, said a further rise in the euro could force the ECB to cut interest rates. The comments took the euro off its intraday highs and the dollar bounce was later supported, albeit briefly, by a rumour that Osama Bin Laden, the al Qaeda leader, had been captured. US officials denied the rumour. After rising to $1.2752 in early European trade, the single currency fell to $1.2662 before coming back to $1.2717 by mid-session in New York, well above Wednesday's levels. "Comments from Davos helped ease the rise of the euro but the market seems to have decided that there is not much that the ECB will do," said Chris Furness at 4Cast economic consultancy. The rand bounced back from a steep fall in morning trade after the South African currency hit a key technical level that triggered a round of selling. Traders had been waiting for the rand to hit 7.22 against the dollar and when it did they sold the currency until it hit an intraday low of 7.2387. It quickly resumed its upward trend, rising to 7.07 by late London trade. The currency has been on the rise this week after hitting a four-month low against the greenback last Friday. The koruna hit a record high after Fitch, the credit ratings agency, upgraded Slovakia to BBB+ from BBB. "The upgrade reflects Slovakia's success in reducing its twin deficits, as its centre-right government has made great progress in implementing public finance reforms and cutting the budget deficit, while booming exports have slashed the current account deficit," said David Heslam at Fitch. The koruna strengthened to 40.442 against the euro before easing off after the central bank said it would act to prevent an "excessive" rise. The economy is expected to benefit from Slovakia’s entry into the European Union in May.