Dollar steady as market studies upcoming US election

LONDON (AFP) - The dollar hovered around eight-month lows against the euro and six-month troughs against the yen on concerns about the strength of the US economy a week before the country's presidential elections.
The single European currency eased to 1.2798 dollars in early European trading from 1.2806 late on Monday in New York.
The dollar stood at 106.76 yen from 106.75 on Monday.
The euro had climbed to as high as 1.2842 dollars overnight approaching an all-time high of 1.2929 dollars reached on February 18.
"It looks like the market is just consolidating before a push towards February's high," said Kamal Sharma, economist at Dresdner Kleinwort Wasserstein.
"Weighing on dollar sentiment are concerns about the sustainability of the US economic outlook, Fed concerns about the current account deficit, and we have the elections coming up."
Mitul Kotecha, head of global currency research at CALYON, said he expected "little improvement" in the dollar's performance in the short-term.
Dollar pressure was set to continue ahead of the November 2 presidential elections, "amidst concerns about the burgeoning (US) current account deficit and disappointing (US) data releases".
The dollar meanwhile continued near six-month lows against the yen -- the market focusing on the uncertainties of the forthcoming US election, with the Democratic Party candidate seen as more hardline on currency intervention, dealers said.
Democrat candidate John "Kerry is seen to be much tougher than (US President George W.) Bush. He would not like to have intervention in the market by Asian countries like China or Japan," said Kosuke Hanao, head of foreign exchange sales at RBS Securities Japan.
Washington has criticized its key trade partners in Asia, China and Japan, for keeping their currencies low against the dollar so as to help exports.
The euro was changing hands at 1.2798 dollars from 1.2806 late on Monday in New York, 136.68 yen (136.69), 0.6959 pounds (0.6949) and 1.5328 Swiss francs (1.5320).
The dollar stood at 106.76 yen (106.75) and 1.1978 Swiss francs (1.1963).
The pound was at 1.8392 dollars (1.8409), 196.35 yen (196.46) and 2.2024 Swiss francs (2.2026).
On the London Bullion Market, the price of an ounce of gold stood at 427.75 dollars against 429.15 on Monday afternoon.

10/26/2004 - 14:44 GMT - AFP