Currencies stable before US rate decision

0 Comments | AFP, August, 2006

LONDON (AFP) — Leading currencies have steadied as the US Federal Reserve prepared to unveil its latest interest rate decision.

The euro edged up to 1.2842 dollars in early European trading on Tuesday, compared with 1.2839 dollars late in New York on Monday.

The dollar stood at 115.09 yen, unchanged from late on Monday.

Most analysts believe that the Federal Open Market Committee will hold US borrowing costs at 5.25 percent later on Tuesday after 17 quarter-point increases in a row to combat inflation.

But, despite expectations of a pause, analysts said that the Fed could signal further rate increases soon.

"Talking a tough line on inflation would help to keep inflationary expectations under control and appeal to those FOMC members who might...