Dollar looks to extend rally against euro

The dollar may extend its near-term gains, especially against the euro, which appears vulnerable, according to a report by the Bank of Tokyo-Mitsubishi UFJ issued in London.

The dollar rose to $1.3426 against the euro. The US currency advanced versus 14 of its 16 most actively traded counterparts.

However, sterling advanced against the US dollar after December services PMI comes in at 40.2 from November's 40.1 and versus a forecast fall to 38.5. GBP/USD traded at 1.4730, from around 1.4700 prior to the numbers, and up from 1.4685 in New York. Meanwhile, EUR/GBP slipped to 0.9135 from around 0.9150 prior to the data.

In Asia, Thailand's baht and the Malaysian ringgit fell to three-week lows on concern deepening recessions in the world's major economies will sap demand for regional assets. The baht, which dropped 15 per cent last year, the most since 1997, extended losses after Prime Minister Abhisit Vejjajiva said the central bank expects the economy to grow between 0.5 per cent and 2.5 per cent in 2009, the least since 1998.

The ringgit weakened 0.4 per cent to 3.5110 in Kuala Lumpur. It earlier reached 3.5182, the lowest since Dec. 18

The Philippine peso, which declined 13 per cent last year, rose after central bank signaled more scope to cut borrowing costs. The currency climbed 0.4 per cent to 46.948 per dollar in Manila.

Follow Emirates 24|7 on Google News.