LONDON (AFP) - The euro edged ahead against the dollar, toying with the symbolic 1.30-dollar threshold despite stronger than expected capital flows into the United States that could ease concerns about the country's gaping current account deficit.
The single European currency in late-day trade was at 1.2982 dollars, against 1.2945 late Monday in New York.
Against the yen the euro was trading at 105.38, up from 105.26 on Monday.
The market appeared to take in stride data showing US producer prices rising at their fastest rate in 14 years in October. Most of the inflation in finished goods prices came from volatile food and energy categories while the core rate, which excludes food and energy, rose a more moderate 0.3 percent.
Separately, total net capital inflows tracked by the US Treasury Department also exceeded predictions, increasing some 63.4 billion dollars in September from a revised 59.9 billion the previous month.
"The lack of dollar buying following this better-than-expected figure suggests that speculators remain in control of the direction of the dollar for the time being," said Michael Woolfolk at Bank of New York.
But the data proved sufficient to prevent speculators from selling the dollar to push the euro to a new all-time high, he added.
"As the reaction to the recent non-farm payrolls report indicates, even good news can provoke speculative dollar (movements)," Woolfolk said.
Elsewhere, the pound kept most of the ground it clawed back in mid-morning trade. Sterling recovered from early falls after news that inflation in Britain edged higher in October steadied market nerves.
The office of National Statistics said the consumer price index in October rose by 1.2 percent from a year ago, in line with expectations and above the 1.1 percent recorded in September.
The rise ended three straight months of declines.
Inflation in Britain remains benign and there is yet very little to suggest that the Bank of England will be forced to hike interest rate to ward off price pressures.
The British currency had been on the backfoot earlier in the day and throughout the Asian session following a survey from the Royal Institute of Chartered Surveyors showing signs of significant cooling in the housing market.
The monthly survey, which found house prices falling at their fastest pace since December 1992, led to a bout of selling on the pound.
The yen meanwhile, continued to remain strong against the dollar, edging ever closer towards the 105 mark despite the speculation that the Japan may start selling its own currency.
The euro was changing hands at 1.2982 dollars from 1.2945 late on Monday in New York, 136.72 yen (136.31), 0.6998 pounds (0.7008) and 1.5242 Swiss francs (1.5260).
The dollar stood at 105.38 yen (105.26) and 1.1747 Swiss francs (1.1792).
The pound was at 1.8536 dollars (1.8466), 195.32 yen (194.34) and 2.1778 Swiss francs (2.1775).
On the London Bullion Market, the price of an ounce of gold stood at 439.40 dollars against 439.50 late on Monday.
11/16/2004 - 17:43 GMT - AFP