Dollar Edges Higher, Euro Stable Ahead of ECB Meeting By

Dollar Edges Higher, Euro Stable Ahead of ECB Meeting By

© Reuters.

By Peter Nurse – The dollar edged higher Thursday, helped by concerns about the strength of the global recovery, while the euro was largely unchanged ahead of a key meeting of the European Central Bank.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, gained 0.1% to 92.730. 

fell 0.2% to 110.06, edged higher  to 1.1815, was flat at 1.3769, while the risk sensitive fell 0.1% to 0.7359.

The dollar was hit hard by Friday’s disappointing jobs report, which the market took to suggest that the Federal Reserve’s tapering of its bond-buying program would be delayed. 

However, the mood has turned a little more risk averse since, with several Fed policymakers on Wednesday signalling the U.S. central bank remains on track to reduce asset purchases this year even while rising Covid cases suggested a slowing in economic growth.

Earlier Thursday, China’s factory gate inflation hit a 13-year high in August, with the rising 9.5% from a year earlier in August, driven by sharply rising raw materials prices.

Against this backdrop of rising global inflation, the will have to decide later Thursday whether the region’s economic recovery is strong enough to support an imminent reduction of its bond-buying.

Expectations are running high that the central bank will announce a timeline to slow down bond purchases, but also try to reassure markets that interest rate increases are still some way off.

“We expect the ECB message to fall short of such expectations, we think the risks are skewed towards a weaker EUR today,” said analysts at ING, in a note. “EUR/USD may therefore continue to unwind recent gains and move back towards the bottom of the 1.17-1.20 range.”

Elsewhere, rose 0.5% to 8.4992, with the lira on the back foot following Wednesday’s comments from the governor of the Turkish central bank, Sahap Kavcioglu, to the effect that core inflation was the key determinant of monetary policy.

“Given that headline and core are currently starting to diverge … the market seems a little fearful that a shift to early easing could emerge – perhaps even at the September 23rd CBT meeting,” said ING.


Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link

Leave a comment

Send a Comment

Your email address will not be published.

Enter text shown below: