LONDON — The safe-haven dollar steadied against rival currencies on Thursday after Chinese economic data raised fears of soaring inflation, dealers said.
In late morning deals here, the European single currency stood at 1.3657 dollars, unchanged from its level late in New York on Wednesday.
Against the Japanese currency, the dollar edged up to 90.52 yen from 90.49 yen on Wednesday.
"Fears about the withdrawal of stimulus measures in China were reinforced today after Chinese inflation hit a 16-month high, industrial production rose and new bank loans came in ahead of forecasts," said analyst Michael Hewson at financial betting firm CMC Markets.
"The inflation figures more than anything else are a concern, with predictions of a rise through three percent, the government's target rate, by next month. These fears about a rise in Chinese rates could well underpin the dollar and pare back risk appetite in the short term."
Chinese consumer prices rose for the fourth month running in February while new lending slowed sharply, official data showed on Thursday, as the government campaigns to tame inflation in the booming economy.
Analysts said the jump would not trigger a knee-jerk response from policymakers in the world's third-largest economy but the figures raised the prospect of more drastic tightening measures later in the year.
The consumer price index, the main gauge of inflation, rose 2.7 percent year on year in February, the National Bureau of Statistics (NBS) said.
Officials insisted the increase was manageable and in line with the three percent target for 2010 put forward by Premier Wen Jiabao last week in his opening speech to China's annual parliamentary session.
"We believe this year's price rises will be mild and controllable," NBS spokesman Sheng Laiyun told a news conference.
"Judging from the current situation, investment, consumption and foreign trade are better coordinated, so we don't see any signs of economic overheating."
In the past week, senior Chinese officials have been at pains to ease fears about inflation, with the chairman of the banking regulatory commission saying it was unlikely price increases would be "more than moderate".
In London on Thursday, the euro was changing hands at 1.3657 dollars against 1.3657 dollars on Wednesday, at 123.62 yen (123.60), 0.9102 pounds (0.9117) and 1.4611 Swiss francs (1.4611).
The dollar stood at 90.52 yen (90.49) and 1.0700 Swiss francs (1.0696).
The pound was at 1.5002 dollars (1.4976).
On the London Bullion Market, the price of gold fell to 1,108.70 dollars an ounce from 1,124.50 dollars an ounce on Wednesday.
