Euro dips against US dollar

The euro dipped against the dollar in early trading Friday, following comments by a European Central Bank governing council member indicating more rate hikes on the horizon.

Photo: Euro dips against US dollar

The 13-nation currency bought US$1.4187 in Friday trading, down slightly from the US$1.4217 late Thursday in New York.

The British pound also slipped against the dollar, buying US$2.0285, compared with US$2.0337 in New York. The dollar gained slightly on the Japanese pound to 117.29 from 117.25 late Thursday.

The comments by Axel Weber late Thursday initially sent the dollar down because they were seen as an indication of future ECB rate hikes, said Michael Woolfolk, senior currency strategist at the Bank of New York, reversing the boost from Friday morning's positive employment numbers and the Commerce Department report on the narrower trade deficit.

The euro had been trading about two U.S. cents off its all-time high of $1.4282, set Oct. 1, before the release on Tuesday of minutes of the Federal Open Market Committee, which led many to speculate another Federal Reserve interest rate cut was being considered in the United States and sent the dollar into a tailspin.

Lower interest rates, used to jump-start the economy, can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns.