Quantcast
Channel: The Punch - Nigeria's Most Widely Read Newspaper »» Business
Viewing all articles
Browse latest Browse all 13057

Euro rally stalls again on ECB outcome

$
0
0

The euro fell against the dollar and a resurgent yen on Thursday, while sterling wallowed at multi-month lows as cautious investors awaited outcomes of central bank policy meetings in Europe and Britain, Reuters reported.

Both the European Central Bank and Bank of England are widely expected to keep interest rates unchanged later on Thursday, but any dovish hints could put both currencies under pressure.

Also overshadowing the meetings are incoming BOE Governor, Mark Carney’s testimony before the UK parliament as well as an Italian banking scandal, which is likely to be a distraction at the ECB’s media conference.

“The overall trend for the euro hasn’t changed, but it has paused,” said Kimihiko Tomita, head of forex at State Street in Tokyo.

“The scandal stirs memories of past scandals, and there’s the possibly that it, too, could become a bigger matter, so this is making some investors cautious,” he said.

The euro moved away from a 34-month high of 127.71 yen hit on Wednesday, shedding 0.1 per  cent to 126.45 yen, but pared losses from an Asian session low of 126.04 yen.

Against the dollar, the euro was nearly flat at $1.3523, holding above this week’s trough of $1.3458 plumbed Tuesday but still shy of a 15-month peak of $1.3711 set on February 1.

Sterling traded nearly flat at $1.5668, not far above a 4-1/2-month low of $1.5630 set Tuesday.

While markets appeared to be positioning for dovish comments from the ECB, some analysts suspect the bank will not be that bothered about the recent strength in the euro

Vassili Serebriakov, strategist at BNP Paribas, said in a client note that the majority on the Governing Council will probably reason that the euro’s strength is a result of real improvement in the financial markets and economic outlook, thus not warranting immediate action.


Viewing all articles
Browse latest Browse all 13057

Trending Articles