The euro eased ahead of the European Central Bank’s monetary policy meeting later on Thursday, with investors cautiously looking forward to central bank chief Mario Draghi’s views on the recent strength of the common currency.
“The focus will be ECB President Draghi’s press conference for his thinking on a resurgent euro, while the economic recovery is gaining momentum as [is] evident from Germany’s manufacturing orders data yesterday,” said Prakash Sakpal, a Singapore-based economist at ING Financial Markets Research.
The euro was fetching $1.3514 in Tokyo afternoon trading, dropping further from around $1.3522 in late North American trade. Against the Japanese unit, the euro was changing hands at 126.33 yen, down from ¥126.88.
The currency had tumbled Wednesday after a poll showed a political coalition of former Italian Prime Minister Silvio Berlusconi has been making headway, rasing concerns about the economic reforms being pursued by the administration of current PM Mario Monti.
So far in 2013, the euro has appreciated in excess of 10% against the yen, and about 2.5% versus the dollar.
While the ECB is widely expected to leave its policy interest rate unchanged, analysts were looking for Mario Draghi’s views on the euro’s strength, and whether that would affect the region’s economic recovery.
“Draghi is fully aware that any talking down of the euro, whose economic challenges and political uncertainty are far from over, could send renewed downward pressure on the currency and its peripheral sovereign bond markets,” said Ashraf Laidi, chief global strategist at City Index.
The ICE dollar index , which measures the greenback against a basket of six major global currencies, climbed to 79.774 as compared with 79.728. The WSJ dollar index , an index that gauges the currency’s moves against a slightly wider basket of rival units, edged up to 71.32 from 71.30.
The dollar was fetching ¥93.50, up from ¥93.37 in New York on Wednesday.
Among other major currency pairs, the British pound was trading at $1.5666 as compared with $1.5659, while the Australian dollar was buying $1.0330 versus $1.0316.
Ahram
