FOREX-Euro trims gains as Trichet cites risks to growth

Thu Aug 7, 2008 1:51pm BST

(Updates with market reaction to Trichet comments)

NEW YORK Aug 7 (Reuters) - The euro pared gains against the dollar on Thursday after European Central Bank President Jean-Claude Trichet said he saw downside risk to economic growth in the euro zone.

The euro EUR= trimmed gains to $1.5448 from about $1.5490 right before Trichet's comments.

In remarks after the ECB held rates steady at 4.25 percent, Trichet said the latest economic data suggested that real economic growth for mid-2008 will be substantially weaker than in the first quarter. See [ID:nFAT004309].

"So far, Trichet's commentary is in line with our expectations -- hawkish on inflation and acknowledging a weaker growth outlook and signaled rates are on hold," said a Forex.com analyst in Bedminster, New Jersey. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Walker Simon, gertrude.chavez@thomsonreuters.com; +1 646 223 6322; Reuters Messaging: gertrude.chavez.reuters.com@reuters.net))

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