Dollar uncertainty ruffles markets

THE euro has started the week trading just below $1.18 against the dollar and Stg0.71p against sterling with activity limited due to holidays in Japan and the United States.

Markets are uncertain about how the relationship between the euro and the dollar will pan out for the rest of the year and comments by the G7 and by outgoing European Central Bank President Wim Duisenberg yesterday have left markets uncertain about exactly where to jump on key exchange rates.

Some support from better than expected trade data on Friday helped the dollar but with lack of clarity about where the US economy is headed in the short has put the currency under pressure in recent weeks.