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Euro near day's highs after ECB outcome; Draghi eyed

Published 09/07/2017, 08:17 AM
© Reuters. FILE PHOTO:An employee shows fifty-euro notes in a bank in Sarajevo
EUR/SEK
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By Saikat Chatterjee

LONDON (Reuters) - The euro held most of its gains against a broad swathe of currencies on Thursday after the European Central Bank reaffirmed its ultra-easy policy stance, with markets shifting focus to Mario Draghi's comments at a press conference shortly.

"The statement was a controlled copy and paste from the previous one and the focus shifts to the press conference where Draghi might talk about the currency's strength," said Viraj Patel, an FX strategist at ING in London.

The European Central Bank reaffirmed its policy stance on Thursday, even keeping the door open to increasing bond purchases, dashing the possibility it would formally signal its intent to claw back stimulus from next year.

The euro was perched near the day's highs against the dollar, up 0.5 percent on the previous day at $1.1974.

Only 15 of 66 economists polled by Reuters had expected 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.

In other major policy news, Sweden's crown fell in volatile trading after its central bank said it planned to tweak its inflation-targeting regime, a move interpreted by markets as dovish.

The crown jumped 0.5 percent against the dollar minutes before the decision but erased all gains and turned lower on the day thereafter.

The euro extended gains against the crown (EURSEK=) and settled at the day's high of 9.5450 per euro. It jumped 0.4 percent after the decision and at current levels the crown has erased all its year-to-date gains against the single currency.

Though the dollar lifted on Wednesday, helped by relief over U.S. President Donald Trump's surprise deal with the Democrats on extending the debt limit, lingering concerns over North Korea limited the currency's upside.

Against a broad trade-weighted basket of its rivals, the dollar fell 0.5 percent lower at 91.83.

© Reuters. FILE PHOTO:An employee shows fifty-euro notes in a bank in Sarajevo

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets

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