Dollar buoyed by strong US results, eurozone fears

NEW YORK (AFP) - The dollar kept its firm tone, supported by strong US corporate results that boosted hopes for a rebound from the 16-month-old recession in the United States. The euro meanwhile came under renewed pressure from expectations the European Central Bank will have to do more to halt the economic slump in the eurozone. At 2100 GMT, the euro was buying $1.3043, down from 1.3178 dollars late Thursday in New York. The US currency meanwhile was little changed at 99.13 yen from 99.25 Thursday. Dealers said better-than-expected first quarter results from struggling US bank Citigroup and industrial and diversified conglomerate General Electric helped bolster confidence in both the US outlook and the dollar. Cautious optimism is the perfect catch phrase for todays events. Things are getting better but it is unclear whether or not this is just a break in the storm, or the very beginnings of stabilization, said Kathy Lien at Global Forex Trading. First quarter earnings are looking predominantly better than expectations. This should be a big boost for morale and the chances that recovery is near. At the same time, the euro was weighed down by comments from ECB president Jean-Claude Trichet that were taken to mean the bank could cut interest rates again or even venture into new unorthodox measures as it struggles to tame the eurozones first recession. Trichet said in a speech in Tokyo that central banks must do all they can to restore, preserve and foster confidence among households and corporations. He hinted again that the bank might unveil unorthodox monetary policy measures at next months meeting of its governing council. Earlier this month the bank lowered its key lending rate by a quarter point to a record low 1.25pc. Investors tend to prefer currencies offering higher yields. Trichet also said it would be wrong to describe the euro as weak, and welcomed recent remarks by top US officials in support of a strong dollar. His comments represent his de facto approval for players to push the euro down further against the dollar, said Yuji Saito, head of forex at Societe Generale. In late New York trade, the dollar rose to 1.1651 Swiss francs from 1.1467 Thursday. The pound was at 1.4795 dollars after 1.4926.

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