Forex

Euro edges up ahead of ECB meet; Riksbank eyed

Reuters SINGAPORE | Updated on January 10, 2018

forex

The euro drifted higher against a broad swathe of currencies on Thursday before a European Central Bank meeting where policymakers may strike a cautious tone about the currency's strength.

Only 15 of 66 economists polled by Reuters expect the ECB to announce a reduction of its monthly asset purchases at Thursday's policy meeting -- a sharp reversal from a month ago when slightly over half of respondents expected such a move.

On a more short term basis, markets will be watching the policy decision from Sweden's central bank where policymakers are widely expected to leave interest rates unchanged.

The Swedish crown is the only major currency that has managed to notch up gains against a resurgent euro this year and market watchers expect the crown to extend gains if the central bank signals a hawkish bias.

“Sweden is perhaps one of the only industrialized nations where inflation is running above trend while the central bank has maintained ultra easy policy conditions and we don't expect them to frontrun the ECB in shifting that stance,” said Thu Lan Nguyen, a foreign-exchange strategist at Commerzbank in Frankfurt.

The euro edged 0.1 per cent higher against the dollar at $.1928 in early trades. It has gained more than 13 per cent so far this year and is the world's top performer in major currencies.

The Swedish crown edged 0.1 per cent up against the euro . It has posted three consecutive months of gains until end August, according to Thomson Reuters data.

Though the dollar gained a lift on Wednesday, helped by relief over US President Donald Trump's surprise deal with the Democrats on extending the debt limit, lingering concerns over North Korea limited the dollar's upside. Against a broad trade-weighted basket of its rivals, the dollar edged 0.2 per cent lower at 92.14.

Published on September 07, 2017

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