Euro holds its ground against dollar on Fed comments

LONDON, Oct 22 (AFP) - The euro held its ground against the dollar here Friday as the US currency was hampered by comments from Federal Reserve officials that suggested US interest rates might stay where they are for a while.
The single European currency in late day trade was at 1.2639 dollars against 1.2613 late in New York on Thursday.
The dollar meanwhile was trading at 107.44 yen after 107.46 on Thursday.
Comments from Federal Reserve Governor Ben Bernanke weighed on the dollar.
Bernanke said higher oil prices had been a "significant shock" to the US economy, although he maintained that the economic consequences would be "manageable."
"The dollar remains on the backfoot against the majors, with comments from the Feds Bernanke surprisingly dovish, noting that oil prices have exercised a 'significant shock' on the US economy," BNP analysts said.
Meanwhile San Francisco Fed President Janet Yellen said the US economy was not "completely out of the woods just yet."
She said high oil prices, business caution and the high trade deficit might cause economic activity or labor market activity to slow down -- developments that cause the Fed to "consider pausing" in the process of raising interest rates.
Steve Pearson, chief currency strategist at HBOS, said worries about the US growth outlook in the wake of sky-high oil prices were likely to keep the dollar under pressure into next week.
Meanwhile, the pound suffered after worse-than-expected third-quarter British growth data.
Official figures showed that economic growth in the third quarter slowed to its lowest rate since the first quarter of 2003 in the wake of weak industrial production.
In its preliminary estimate of third quarter GDP growth, the Office of National Statistics said the economy grew by 0.4 percent in the third quarter from the previous quarter against expectations of a 0.5 pct increase.
That was substantially down on the 0.9 percent pace recorded in the second quarter and is likely to cement expectations the Bank of England will not raise interest rates again this year.
The euro was changing hands at 1.2639 dollars from 1.2613 late on Thursday in New York, 135.78 yen (135.55), 0.6915 pounds (0.6901) and 1.5376 Swiss francs (1.5355).
The dollar stood at 107.44 yen (107.43) and 1.2166 Swiss francs (1.2174).
The pound was at 1.8278 dollars (1.8269), 196.38 yen (196.25) and 2.2233 Swiss francs (2.2247).
On the London Bullion Market, the price of an ounce of gold stood at 422.80 dollars against 422.50 on Thursday afternoon.

10/22/2004 16:51 GMT - AFP