* Dollar index eases from 14-month high
* Dollar/yen edges towards 6-year high before slipping
* Russian rouble rebounds from record low vs dollar
* Fed's Beige Book shows continued U.S. growth
(Updates market action after Fed's Beige Book)
By Richard Leong
NEW YORK, Sept 3 The euro steadied against most
major currencies on Wednesday on speculation of a possible
ceasefire in eastern Ukraine, offering some relief to the euro
zone which has absorbed the brunt of the economic impact from
The common currency rose from its one-year low versus the
dollar after Ukraine's President Petro Poroshenko said an
agreement was reached with his Russian counterpart Vladimir
Putin for a "permanent ceasefire" in eastern Ukraine's Donbass
The initial optimism faded shortly after the Kremlin said a
ceasefire had not been agreed between Moscow and Kiev. The two
sides could still reach a deal at planned talks in Minsk on
The mixed messages caused some confusion, but most investors
were relieved by signs both countries were moving towards peace.
"Still the gist of the headlines are a positive one," said
Sireen Harajli, currency strategist at Mizuho Corporate Bank in
The euro last traded on the EBS platform up 0.07 percent at
$1.3142, recovering from a one-year low of $1.3110
struck on Tuesday, but it dipped 0.16 percent at 137.79 yen
after touching an eight-week high earlier at 138.28
The dollar weakened against the Russian rouble on the
ceasefire talk. The greenback fell 1.6 percent to 36.844 roubles
after hitting a record high of 37.515 roubles on Monday.
The conflict in Ukraine and related sanctions imposed by
western countries on Russia have taken its toll on the euro zone
which analysts reckon will need more stimulus from the European
While the ECB is unlikely to take action on Thursday, the
threat of falling prices, along with uncertainty to the recovery
from the Russia/Ukraine conflict, is likely to see President
Mario Draghi flag the prospects of more easing in coming months.
"Conditions in the euro zone continue to weaken. It's a
matter of time (before) the ECB has to act aggressively," said
The euro's recovery saw the dollar index edge down 0.14
percent to 82.879, which was not far below a 14-month high of
83.058 set earlier. The dollar has made an impressive
start in September on strong domestic economic data .
The U.S. Federal Reserve's Beige Book on regional economic
activities released on Wednesday showed ongoing expansion across
the United States in recent weeks, but the pace of growth did
not accelerate, supporting traders' expectations the Fed would
leave interest rates near zero at least into the middle of 2015.
"The Fed's outlook is largely intact. There are no worries
for an early Fed exit," said Sean Incremona, an analyst at 4Cast
Ltd. in New York.
Meanwhile, the yen was supported by expectations that the
Bank of Japan, which began a two-day policy meeting, may sit
tight and reiterate its view that the economy is recovering
The yen would also remain under pressure on bets that
Japan's behemoth Government Pension Investment Fund (GPIF) would
decide in the coming weeks to put more money into riskier assets
including stocks and foreign bonds, which could increase demand
for foreign currencies.
Against the yen, the dollar declined 0.23 percent at 104.83
yen, below an eight-month high of 105.31 yen on the
EBS system. A break above 105.45 yen would take the greenback to
a high not seen since October 2008.
(Additional reporting by Anirban Nag in London; Editing by Toby
Chopra and Bernadette Baum and Chizu Nomiyama)