NEW YORK (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.
The euro was traded at 1.4920 dollars around 2100 GMT, up from 1.4898 dollars late Monday.
Against the Japanese currency, the dollar dropped to 109.31 yen from 110.10.
"The US dollar offers negative interest rates when adjusted by inflation and the Federal Reserve could be pressured to increase rates faster than traders had expected," said Antonio Sousa, chief strategist at Forex Capital Markets.
"This week, the release of inflation figures for several countries is likely to catch the attention of many traders. Indeed, we expect consumer prices to increase to record levels but also to be close to peaking since energy prices are significantly lower than they were in the previous month," he said.
Sousa predicted the euro would trade below 1.45 dollars in three months and the dollar would be above 120 yen in six months.
The dollar's recent strengthening has helped push crude oil prices lower, easing inflation concerns.
The New York crude oil futures contract closed at 113.01 dollars Tuesday, down 23 percent from a record-high 147.27 dollars on July 11.
"Given the recent pullback in commodities -- from oil to food -- central banks around the globe are holding their breath to see if it can last long enough to get prices at the consumer level to drop," said Andrew Busch at BMO Capital Markets.
Later this week, economic growth data from Germany and the eurozone were expected to further pressure the single European currency.
"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 would lower interest rates to spur flagging growth.
"A rate cut within the next couple of months looks well off the agenda," Capital Economics analyst Vicky Redwood said in response to the data.
In late New York trade Tuesday, the pound was at 1.8965 dollars, down from 1.9096 dollars Monday.
The dollar slipped to 1.0865 Swiss francs from 1.0870.
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