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Dollar lower versus euro ahead of ECB

Published 02/07/2013, 04:37 AM
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Investing.com - The dollar was lower against the euro on Thursday as investors awaited remarks by European Central Bank President Mario Draghi at the bank’s post-policy meeting press conference later in the day, while the greenback was steady near two-and-a-half year highs against the yen.

During European morning trade, the greenback was lower against the euro, with EUR/USD up 0.31% to 1.3561.

Demand for the euro was underpinned by optimism that the debt crisis in the euro zone has turned a corner after recent economic data pointed to signs of a recovery in the region.

The ECB was widely expected to leave interest rates unchanged at 0.75% on Thursday.

Market participants remained cautious ahead of remarks by President Draghi amid wariness that he could express concerns over the impact of the stronger euro on the economic recovery.

The dollar was close to its highest level against the yen since mid-May 2010, with USD/JPY rising 0.17% to 93.78 as expectations for more aggressive easing measures by the Bank of Japan continued to weigh on the yen.

The greenback was trading close to five-month highs against the pound, with GBP/USD easing up 0.08% to 1.5671.

In the U.K., official data showed that manufacturing production rose 1.6% in December, double expectations for a 0.8% increase, while industrial production increased by 1.1%, compared to expectations for a 0.9% rise.

A separate report showed that the U.K. trade deficit narrowed to GBP8.9 billion in December, in line with expectations from a revised deficit of GBP9.3 billion the previous month.

The Bank of England was to announce its benchmark interest rate later in the day, while incoming BoE Governor Mark Carney was to appear before a U.K. parliamentary committee.

Elsewhere, the greenback was lower against the Swiss franc, with USD/CHF sliding 0.27% to 0.9075.

A report by the Swiss National Bank showed that foreign currency reserves decreased for a fourth successive month in January, falling to CHF427.04 billion from CHF427.19 in December.

A separate report showed that Switzerland’s SECO consumer confidence index improved in January for the first time in three quarters.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching up 0.03% to 0.9958, AUD/USD edging up 0.02% to 1.0320 and NZD/USD falling 0.46% to 0.8356.

In Australia, official data showed that the economy added 10,400 jobs in January, outstripping expectations for a 5,000 increase, while the unemployment rate remained unchanged at 5.4%.

The number of people employed in New Zealand declined by 1% in the fourth quarter compared to expectations for a 0.4% increase official data showed, but the unemployment rate ticked down to 6.9% from 7.3% in the third quarter.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.19% to 79.65.

The U.S. was to release government data on initial jobless claims later in the trading day.



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