Euro steadies near four-week low against the dollar

THE euro held steady near its four-week low against the dollar yesterday after the European Central Bank left rates unchanged at 3.25%, as expected.

The ECB made no additional comments in announcing its rate decision and no news conference was scheduled. “An unchanged decision was completely in line with expectations,” said Jake Moore, currency strategist at Barclays Capital.

“The economic backdrop means that rates are unlikely to go up any time soon.

By 1148 GMT the euro stood at $0.9740, down a third of a per cent from late New York levels on Wednesday, and 116.93 yen, also down on the day.

Earlier, a better than expected eurozone manufacturing purchasing managers’ index failed to lift the euro as a slip in index raised concerns about the eurozone’s vulnerability to faltering US growth.

The Bank of England yesterday left its key lending rate unchanged at a 38-year low of 4.0% for a ninth month running as stock market uncertainty cast a pall over the global economic outlook.

The Monetary Policy Committee’s decision to hold fire on rates had been widely forecast by economists, particularly after a spate of recent signs that plunging stock valuations may have dented robust consumer confidence.

Expectations that borrowing costs will soon be raised have been overturned in recent weeks, as fears escalate over the health of corporate America and the possibility that the global economy’s tentative recovery from last year’s slowdown will prove short-lived. Despite a runaway property boom that has seen house prices soar by more than 20% in the past year, several economists now feel the next move in UK interest rates is more likely to be down than up.