LONDON, Sep 28, 2010 (AFP) - The euro steadied against the dollar on Tuesday as traders sought direction from fresh concerns over eurozone economies and the prospect of monetary easing measures from the United States and Japan. In morning trading here, the euro edged up to 1.3449 dollars from 1.3448 dollars late on Monday in New York. The dollar fell to 84.23 yen from 84.31. Long-term yields on Irish and Portuguese sovereign bonds soared to the highest levels since the launch of the euro in 1999, signalling fresh concern about stretched public finances in the eurozone. But the British pound rose against the euro and dollar as official data confirmed that Britain's economy had grown at its fastest in nine years during the second quarter. Amid concerns over Japan's economy, a report by the Nikkei business daily said the Bank of Japan (BoJ) would discuss taking additional monetary easing measures at a meeting next week. The central bank may increase lending of fixed-rate loans maturing in three to six months to financial institutions and step up buying of short-term government debt securities, it said, without citing sources. These measures would be aimed at boosting the effect of the government's intervention in the currency markets to stem the strong yen, which is hurting the export-dependent economy. However, the dollar has been kept in check as traders expect the US Federal Reserve to also announce steps to kickstart the world's biggest economy. "The direction is hard to discern in the dollar-yen trade as expectations on additional monetary easing by both Japanese and US authorities are mounting," Barclays Capital said in a note to clients. The world is meanwhile in the grip of a currency "war", with leading nations using devaluation to solve economic problems, Brazilian Finance Minister Guido Mantega has warned in remarks reported from Sao Paulo. "We're in the midst of an international currency war, a general weakening of currency," he said in remarks reported by the Financial Times newspaper. "This threatens us because it takes away our competitiveness." Japan, South Korea and Taiwan have intervened recently to pull down the value of their currencies, the newspaper noted, and the dollar has fallen by about 25 percent so far this year against the Brazilian real. Such a fall increases the price of Brazilian exports on the US market. The remarks are set against a background of increasing tension notably between the United States and China over the value of the yuan. The United States has complained for years that China has held down artificially the value of its currency, preventing it from rising to reflect the strength of China's foreign exchange earnings from exporting, notably to the US market. In London on Tuesday, the euro changed hands at 1.3449 dollars against 1.3448 dollars late in New York on Monday, at 113.30 yen (113.35), 0.8478 pounds (0.8495) and 1.3251 Swiss francs (1.3257). The dollar stood at 84.23 yen (84.31) and 0.9850 Swiss francs (0.9856). The pound was at 1.5865 dollars (1.5822). On the London Bullion Market, the price of gold fell to 1,289 dollars an ounce from 1,297 dollars an ounce late on Monday.

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