NEW YORK, August 12, 2008 (AFP) – The euro ticked slightly higher against the dollar Tuesday in a market awaiting a fresh batch of indicators on the fragile economic health of the eurozone. “On Thursday, weak GDP (gross domestic product) data from Germany and the eurozone will highlight the problems of the European economies, putting euro/dollar again under pressure,” said Commerzbank analyst Ulrich Leuchtmann.
Expectations of an interest rate hike by the European Central Bank (ECB) have receded in light of recent weak eurozone economic data.
“Market sentiment is focused on slowing growth in Europe,” said Kenichi Yumoto, vice president of forex sales at Societe Generale.
The euro gained little support from a warning by ECB council member Klaus Liebscher that there is “absolutely no room for complacency” on inflation.
The ECB kept its lending rates steady last week at 4.25 percent, acknowledging worries about the health of the eurozone economies.
The British pound, meanwhile, briefly sank under 1.9 dollars on Tuesday after the Office of National Statistics reported July inflation spiked to an annual 4.4 percent, a 16-year high, dashing hope that the Bank of England w