ECB, Bank of England hold rates steady, dollar weakens

Chief Regulatory Officer at CSE Renuke Wijayawardhane presenting the listing certificate to Executive Chairperson at Renuka Hotels Shibani Thambiayah

NEW YORK, Sept 6, 2007 (AFP) – The dollar weakened against the euro and other currencies Wednesday after the European Central Bank opted to keep borrowing costs on hold amid financial market and credit jitters. The pound was being traded at 2.0237 dollars, up from 2.0204 a day earlier. The ECB left open the option of a further rise in interest rates to keep a lid on inflation, but will wait to assess the impact of the current turmoil on the financial markets before deciding when to act, the bank’s president, Jean-Claude Trichet, indicated.

The euro was swapping hands at 1.3690 dollars at 2100 GMT, up from 1.3642 dollars in New York late on Wednesday. The European currency had earlier surged as high as 1.3710 dollars as traders bought euros and sold dollars.

The dollar gained some momentum against the Japanese yen, however, rising to 115.33 yen, compared with 115.26 yen late on Wednesday.

The ECB, known as the guardian of the euro, held its main lending rate unchanged at 4.00 percent at its regular monthly policy-setting meeting, even though it had earlier been flagging a rate hike this month.

The dollar came under pressure following the ECB’s decision as speculators expect the US Federal Rese