Euro sags ahead of ECB rate decision

TOKYO, Feb 7, 2008 (AFP) – The euro was slightly weaker against its major rivals in Asian trade on Thursday amid nervousness ahead of an interest rate decision by the European Central Bank, dealers said. They said traders were also cautious about a weekend meeting of world finance chiefs in Tokyo where recent financial market turmoil and fears of a global economic slowdown are set to top the agenda.

Activity was subdued due to market holidays in many Asian countries for the Lunar New Year.

The dollar was quoted at 106.54 yen in Tokyo afternoon trade, almost unchanged from 106.56 yen in New York late Wednesday.

The euro dipped to 1.4618 dollars after 1.4633 and to 155.74 yen from 155.88.

Dealers were betting that the ECB would leave its interest rates on hold at 4.0 percent at a meeting Thursday due to worries about upward price pressures in the eurozone.

“Given high inflation, it looks to be too premature to start talking about the possibility of a rate cut” in the eurozone, said Bank of Tokyo Mitsubishi UFJ chief analyst Osamu Takashima.

“If so, the euro is most likely to maintain its rising trend against the dollar.”

Investors will also be closely watching remarks f