Thin trade with U.S. shut for Thanksgiving holiday
LONDON (MarketWatch) -- The U.S. dollar was flat against the euro and mixed versus other major counterparts Thursday in lackluster trade amid the Thanksgiving Day holiday.
With U.S. markets shuttered, traders noted thin volume.
The euro initially posted slight gains versus the dollar on a firmer tone in Asian and European equity markets. See Europe Markets.
In recent action, the single currency traded at $1.2881 against the dollar, little changed from the level seen in North American trade late Wednesday.
Strategists at BNP Paribas said the euro should manage to gain further ground in the near term. They argued that the market's focus has shifted from the "economic damage of the credit crunch towards the positive effects of economic support programs."
The European Commission on Wednesday proposed a 200 billion euro ($260 billion) stimulus program for the 27-nation European Union, with 170 billion euros expected to come from national governments. See full story.
Terror attacks in Mumbai, India, had little overall impact on currency markets, strategists said. See full story.
India's central bank closed foreign exchange and other markets after the attacks. Separately, the rupee lost ground in the offshore market for non-deliverable forwards, news reports said.
The dollar traded at 95.43 yen against the Japanese currency, down slightly from 95.52 yen late Wednesday.
The European Commission's monthly economic sentiment index plunged in November to a 15-year low of 74.9. Analysts had expected a smaller decline to 78 from October's reading of 80. See full story.
The data underlined expectations the European Central Bank will move to cut rates aggressively next week, analysts said.
Meanwhile, the number of German unemployed posted an unexpectedly large decline of 10,000 in November after a decline of 23,000 in October. Economists were expecting a more modest decline of 3,000.
Still, the labor market tends to lag cyclical developments in the real economy, "so that the labor market situation can be expected to deteriorate in coming months," said Thorsten Polleit, an economist with Barclays Capital.
The British pound traded at $1.5382 versus the dollar, up around 0.3% on the day.
Sterling got an early boost from a smaller-than-expected decline in U.K. house prices in November.
House prices fell 0.4% in November, leaving the average price down 13.9% from the same month last year, mortgage-lender Nationwide's monthly housing survey found. House prices tumbled 1.3% in October for a 14.6% annual decline. See full story.
The decline was less severe than had been expected. Economists had produced a consensus forecast of a 1.6% monthly decline and a 15.4% drop from November 2007.
