Dollar slips against euro

THE dollar slipped against the euro and Swiss franc yesterday despite hints of recovery in the US labour market, depressed by soaring oil prices and news of a flare-up of fighting in the Iraqi holy city of Najaf.

The dollar also lost a little ground against the euro after an index of US leading indicators declined more than expected. Earlier, initial US weekly jobless claims dipped to 331,000 for the latest week, below forecasts for 335,000.

“The (claims) report was pretty much on the expectations,” said John Beerling, regional foreign exchange trading desk manager for Wells Fargo in Minneapolis, but he added that “the market is in a mood to test the upside in the euro.”

Oil futures in New York were trading near $48 per barrel. Economists view high oil prices as a tax on consumers, diverting disposable income, and a negative factor for the dollar if this curbs growth in the world’s biggest economy.

Mid-morning in New York, the euro was trading around $1.2350, according to Reuters data, up about 0.1% on the day.

Against the yen, the dollar was trading at 109.41 yen, up slightly.

Against the Swiss franc, the dollar was down 0.1% at 1.2432 francs. Sterling gained 0.5% at $1.8310.

The Conference Board’s report on July US leading indicators showed a fall of 0.3% whereas economists had forecast a decline of 0.2%. The euro pushed modestly higher against the dollar in initial reaction to the indicators report.

“There will be some interest in the Philly Fed, especially after the Fed survey,” said Grant Wilson of Mellon Bank, Pittsburgh.