Source AP ©

Euro edges higher against U.S. dollar

The euro edged slightly higher against the U.S. dollar on Thursday, even as world markets continued to surge up and down amid fears about the lending climate in the United States.

The 13-nation euro bought US$1.3662 in midmorning European trading, slightly more than the US$1.3656 it bought in late New York trading the night before.

The British pound was barely changed, trading at US$2.0294 - compared with US$2.0280 late Wednesday. The dollar was up to 118.82 Japanese yen from 118.55 yen.

The dollar had appeared to recover late Wednesday, at least nominally, after a National Association of Realtors report showed that pending sales of existing homes rose 5 percent in June from a the previous month, marking the largest monthly gain in more than three years.

U.S. economic data are being watched for hints about the Federal Reserve's future course on interest rates. The Fed has kept rates on hold for the past year even as the European Central Bank and Bank of England raised the cost of borrowing.

The ECB and BoE are expected to keep their rates unchanged when they meet Thursday, though both are expected to raise rates later this year.

Higher interest rates, a weapon against inflation, can support a currency by offering investors better returns on investments denominated in that currency.

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