By Chikako Mogi
TOKYO, April 15 (Reuters) - The dollar edged up against the
yen and euro on Tuesday in generally cautious trading ahead of
U.S. economic data and first-quarter earnings results from
financial institutions this week.
Concerns about the U.S. economy and fresh doubts about credit
markets are offsetting the support for the dollar from the Group
of Seven financial heads' strongest expression in seven years
about volatility in major currencies, traders said.
"The broad weak dollar trend hasn't changed, and the market
is returning to economic data and earnings results this week for
clues, with the bias towards dollar selling," said a senior
dealer at a European bank.
The euro eased 0.1 percent from late U.S. trade to $1.5824
<EUR=>, but was up from Monday's post-G7 low of $1.5658. It hit a
record high of $1.5915 on electronic trading platform EBS last
Thursday.
The dollar rose 0.1 percent against the yen to 101.18 yen
<JPY=>, helped by Japanese investor buying of foreign assets,
traders said.
The Australian dollar <AUD=D4> fell briefly after minutes of
an Australian central bank meeting reinforced the view that it
had tightened monetary policy sufficiently for the time being.
The Reserve Bank of Australia saw domestic demand moderating
when it left interest rates unchanged at a 12-year high of 7.25
percent this month, the minutes showed. []
The currency later regained some lost ground to rise 0.2
percent on the day to $0.9293, helped by Japanese buying of
higher-yielding assets.
Sterling fell 0.3 percent to $1.9730 <GBP=D4> after a UK
house price survey on Tuesday showed the lowest reading in its
30-year history. []
The report reinforced concerns about falling house prices and
suggested the Bank of England will keep cutting interest rates to
support the economy.
Sterling also slipped to around 80.15 pence <EURGBP=D4>
against the euro from around 80 pence in late New York trade.
EURO UPTREND INTACT
After meeting on Friday, the G7 financial heads said they
were worried that sharp currency moves could undermine economic
and financial stability. But traders were sceptical those words
would translate into coordinated currency intervention to prop up
the dollar.
Traders said the dollar's weakness reflected a sluggish U.S.
economy and 3 percentage points in rate cuts since September. The
Federal Reserve is expected to cut its fed funds rate again later
this month from the current 2.25 percent.
In contrast, the European Central Bank has held rates at 4
percent for more than a year.
"The euro has scope to scale fresh highs as the market will
want to test the resolve of the authorities, with the notion that
there would likely be no action to prevent the euro's rise," the
senior dealer said.
The euro, which is in a triangle formation on technical
charts, may be poised to shoot higher, market players said.
One target for the euro could be around $1.6040, which would
be a 123.6 percent reversal of the euro's fall from around
$1.5905 to $1.5340 seen in the latter half of March, said Masashi
Hashimoto, senior analyst for Bank of Tokyo-Mitsubishi UFJ.
The currency market has a raft of data to absorb this week
including the U.S. producer price index for March later on
Tuesday and the U.S. March consumer price index on Wednesday.
Merrill Lynch <MER.N> and Citigroup <C.N> are due to report
first-quarter results later in the week. Analysts expect both to
announce billions of dollars in bad debt write-downs.
(Additional reporting by Masayuki Kitano; Editing by Hugh
Lawson)
