The greenback was staging a minor rally against the euro Tuesday as officials cautioned against allowing any further appreciation in the European Union's major currency. Euros were trading for $1.4158, down from $1.4238 late Monday, in recent foreign exchange market action. The CurrencyShares Euro Trust ( FXE), which tracks the value of the euro, was slipping 0.6%. "There has been greater and greater discontent with the strength of the euro," says Naomi Fink, a senior currency strategist at BNP Paribas in New York. A stronger currency makes a country's goods more expensive to foreign buyers and tends to slow down growth in export-focused industries. So the recent appreciation in the euro, which has rallied from around $1.30 in January, raises concern with European Central Bank officials that their economies might start suffering if the currency surge continues. In the meantime, traders will be waiting to hear from the ECB and the Bank of England Thursday, followed by U.S. payroll data Friday. Fink adds that a robust showing in the jobs data could spark a further backup in the euro's value against the dollar. Elsewhere in the currency markets, the dollar was buying 115.77 yen, up marginally from 115.69 yen previously. The British pound was barely changed, selling for $2.041 vs. $2.0437 a day earlier.
The CurrencyShares British Pound Sterling Trust ( FXB) and the Japanese Yen Trust ( FXY) were both off 0.1% in morning action. Currencies associated with resource-rich economies were weakening slightly in line with general softness in the commodities complex. One U.S. dollar was buying AU$1.132, up from AU$1.118 previously. The greenback was selling for C$1 up from C$0.9915 a day earlier.