U.S. dollar trades higher in Europe

LONDON (UPI): The U.S. dollar was trading slightly higher across Europe yesterday morning, but sterling extended its gains on speculation that Chancellor of the Exchequer Kenneth Clarke will be forced into an early hike in British interest rates.

In London, the U.S. currency was quoted at 1.5029 German marks, up on the previous finish of 1.5020. The dollar traded at 111.66 Japanese yen from the previous finish of 111.67.

Economists said that with the market seemingly regarding any sell-offs as attractive buying opportunities, sterling had become the one currency that it was relatively easy to make money on.

The main factor behind recent sterling strength is the persistence of the feeling that base rates will be raised again before the end of the year, and analysts said the markets were pricing in a further 50 basis point hike.

The dollar was stuck in a relatively narrow range against the mark, as the release of the Bundesbank's monthly report failed to have an impact.

Sterling was being quoted at 2.5139 German marks from its previous finish of 2.5086 marks.

In Frankfurt, the dollar opened at 1.5025 German marks, down from the previous close of 1.5071.

In Zurich, the dollar opened at 1.2700 Swiss francs, unchanged from the previous close.

In London, the pound opened at US$1.6731, up from the previous close of $1.6714.

In Paris, the dollar opened at 5.0820 French francs, up from the previous close of 5.0740.

In Brussels, the dollar opened at 30.99 Belgian francs, up from the previous close of 30.89.

In Milan, the dollar opened at 1,514 Italian lira, down from the previous close of 1,515.85.

In Tokyo, the dollar closed at 111.67 Japanese yen, up from the previous close of 111.14.

In Singapore, the dollar closed at S$1.3995, down from the previous close at 1.3996.

In Hong Kong, the dollar closed at HK$7.7320, down from the previous close of 7.7325.

Gold opened at d378.70 an ounce in Zurich, down from the previous close at d379.40, while in London it started trading at $379.25, unchanged from the previous close. In Hong Kong, gold closed at US$378.65, down from the previous close at $380.25.

Silver opened at $4.88 in Zurich, down from the previous close at $4.91, while in London it opened at $4.91, up from the previous close at $4.90.