Euro rally stalls on ECB outcome
The euro fell against the dollar and a resurgent yen this morning, as cautious investors awaited outcomes of central bank policy meetings in Europe.
The euro fell against the dollar and a resurgent yen this morning, while sterling wallowed at multi-month lows as cautious investors awaited outcomes of central bank policy meetings in Europe and Britain.
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 foreign exchange 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 yesterday, 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 1st.
Sterling traded nearly flat at $1.5668, not far above a 4-1/2-month low of $1.5630 set Tuesday.