LONDON (AFP) - The dollar steadied after a rebound from eight-month lows against the euro, but analysts saw little respite in sight for the US currency given a host of concerns about the US economy.
The single European currency stood at 1.2756 dollars in early European trading against 1.2768 late on Tuesday in New York.
The euro had scaled an eight-month summit of 1.2842 dollars overnight Monday-Tuesday before the greenback clawed back.
The dollar was changing hands at 106.72 yen from 106.70 on Tuesday.
The US currency has come under renewed pressure against the euro and yen in recent days amid jitters over the huge US current account and budget deficits, high oil prices and the deadlocked US presidential race.
The dollar received a boost Tuesday from a less gloomy than expected report on US consumer confidence, despite a third consecutive monthly fall.
But analysts did not expect the rebound to continue much further.
"There is nothing to suggest the underlying enthusiasm for euro upside has disappeared," said CALYON analyst Mike Carey.
Oil prices remain a major factor, and although crude futures fell back after Saudi Arabia declared it was ready to boost output, fundamental concerns over supply ahead of the northern hemisphere winter still remained.
Many analysts now expect the euro to test an all-time high of 1.2929 dollars reached on February 18.
The market was also awaiting the release of US durable goods data later Wednesday, with new orders expected to post a rise in September after declining 0.3 percent in August. The US Federal Reserve was also due to release its October Beige Book assessment of the economy.
Sentiment towards the yen was tested by fears that continuing strong tremors in northern Japan would hurt the world's second-largest economy, though the Japanese currency managed to hold its ground, dealers said.
A tremor measuring 6.0 on the Richter scale on Wednesday struck the central Japan region already devastated by a series of powerful quakes, causing the key Tokyo stock index to dip before recovering in the afternoon.
"Modest yen selling emerged as the news of another earthquake raised fears that it would deal a blow to the Japanese economy," said Masayoshi Shirahige, senior forex manager at Himawari Securities.
In early trade, the yen was sold also on news that Islamic militants had taken a Japanese citizen hostage in Iraq and threatened to execute him if Tokyo does not withdraw its troops from Iraq in 48 hours. Tokyo said it would not bow to the demands.
The euro was changing hands at 1.2756 dollars from 1.2768 late on Tuesday in New York, 136.10 yen (136.24), 0.6949 pounds (0.6958) and 1.5321 Swiss francs (1.5335).
The dollar stood at 106.72 yen (106.70) and 1.2010 Swiss francs (1.2011).
The pound was at 1.8353 dollars (1.8346), 195.87 yen (195.76) and 2.2047 Swiss francs (2.2035).
On the London Bullion Market, the price of an ounce of gold stood at 425.85 dollars against 427.50 on Tuesday afternoon.
10/27/2004 - 10:46 GMT - AFP