Dollar edges down against euro with ECB on deck

Dollar edges down against euro with ECB on deck

The U.S. greenback held broadly regular round a three-month excessive Thursday, however was barely down against the euro earlier than European Central Bank President Mario Draghi was set to debate the central financial institution’s financial coverage choice and certain provide his ideas on development within the eurozone economic system.

What are currencies doing?

The ICE U.S. Dollar Index

DXY, -0.15%

which gauges the buck against a basket of six currencies, was fractionally decrease at 91.170, after reaching its highest level since mid-January on Wednesday, in accordance with FactSet information.

The WSJ Dollar Index

BUXX, -0.14%

which measures the dollar against a wider basket of currencies, fell zero.2% to 85.14, additionally pulling again from its highest since January.

The euro

EURUSD, +0.1562%

 purchased $1.2186, up from $1.2161 late Wednesday in New York.

The British pound

GBPUSD, +0.2297%

 traded at $1.3966, up from $1.3930 within the prior session and an enchancment from a Thursday intraday low of $1.3895. That was the primary transfer beneath $1.39 in six weeks, FactSet information confirmed.

The dollar against the Japanese yen

USDJPY, -0.22%

was at ¥109.24, down from ¥109.43. The Bank of Japan will subject its newest coverage choice on Friday.

Read: BOJ’s Kuroda sees potential end to QE, says no currency manipulation in Japan

What’s driving the market?

The euro is in focus Thursday, with merchants set for additional clues on when the European Central Bank goals to wind down its large bond-buying program and begin to elevate rates of interest, though little or no motion is predicted at this assembly.

The ECB in March shocked markets by signaling it’s on observe to finish its stimulus program earlier than the top of 2018. But since then, financial information have pointed to a slowdown within the eurozone economic system. That’s led buyers to dial again expectations for the beginning of price hikes in the midst of 2019. As nicely, core inflation at 1% continues to be nicely beneath the ECB’s goal of close to, however just under, 2%.

The ECB’s coverage assertion is due at 12:45 p.m. London time, or 7:45 a.m. Eastern Time. Draghi will maintain a information convention at 1:30 p.m. London time, or eight:30 a.m. Eastern. The euro traded above $1.24 through the ECB’s assembly in March.

See: 4 outcomes for the ECB meeting, in 1 handy chart

And learn: Expect a careful, dovish Mario Draghi

The greenback has loved features in latest classes because the 10-year Treasury

TMUBMUSD10Y, -1.02%

 held above a four-year excessive above three%. Those strikes have come on the again of rising inflation expectations and bolstered hypothesis that the Federal Reserve will ramp up its tempo in elevating rates of interest this yr.

See: What recent CFTC data mean for dollar bulls

Read: Dollar rebound not here to stay: analyst

Economic information

The weekly jobless declare report is due at eight:30 a.m. Eastern Time. Also on the time, March figures on sturdy items orders, core capital gear orders and advance commerce in items are anticipated.

At 10 a.m. Eastern, information on housing vacancies for the primary quarter are scheduled to come back out.

See: MarketWatch’s economic calendar

What are strategists saying?

“The problem for the ECB will be how to project confidence without sparking a market reaction that could send interest rates higher prematurely and thereby derail the fragile recovery,” stated Marshall Gittler, chief strategist at ACLS Global, in a observe.

“I expect that they will present a confident view on the economy — that’s EUR-positive. On the other hand, I think they will also want to calm the markets and prevent any anticipatory tightening in financial conditions – that’s EUR-negative,” he stated. “Overall, I would say that from their point of view, the risks of investors anticipating a tightening too early are greater than the risks of them losing confidence at this point, and so I would expect a generally dovish tone that may cause EUR to move lower.”

Check out: Why the premium for German bonds over Treasurys is the widest in 30 years

Also learn: What it means for the market that the U.S. 10-year government bond yield hit 3%

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