The euro closed below a two-week high against the dollar as investors braced for support for the European Central Bank’s first interest rate hike since 2011 and plans to reopen a key Russian gas pipeline later in the day.
The currency is also under pressure from the collapse of the Italian government’s demand.
Meanwhile, the yen fell ahead of the Bank of Japan’s policy decision on Thursday, with the central bank likely to stick to easy fundamentals.
The euro rose 0.06% to $1.0188, following a 0.39% overnight retreat from an intraday high of $1.0273, the highest since July 6.
The euro has experienced three sessions of strong gains this week on expectations the ECB could cut interest rates by 50 basis points and Reuters reports that Russia’s main gas pipeline will reopen soon after a 10-day maintenance shutdown.
The European Union asked member states on Wednesday to cut gas use by 15% until March as an emergency measure after President Vladimir Putin warned that Russian products sent through a major pipeline to Europe could be cut further. and can stop.
Markets are divided on whether ECB policymakers will telegraph the first 25 basis points increase or a half-rate increase to try to lower rates faster.
Investors can also provide more details of new tools aimed at controlling the high rise in bond yields in Europe.
National Australia Bank sees this meeting as having mixed effects for the euro.
“The political uncertainty of Italy makes the ECB plan to give details on its new anti-segregation instrument, especially about the conditions for the instrument to be introduced,” and the lack of clarity can drag on the euro, NAB financial advisor Rodrigo Catril wrote that. Customer note.
At the same time, NAB expects a half increase and guidance for another half increase in September “and the Bank wants to raise the burden further in the face of weak conditions later in 2022 and in 2023, when the house to move can be. limited,” said Catril.
In Japan, the BOJ is expected to continue defusing the global monetary policy by keeping the stimulus base steady, as Governor Haruhiko Kuroda has repeatedly telegraphed during the meeting.
The dollar rose 0.07% to 138.345 yen, returning to the direction of the 24-year high at 139.38 seen a week ago.
Sterling continued to trade below $1.20 as the field of candidates for the British presidency narrowed to two, but a winner is not expected until September 5.
The Australian dollar was little changed at $0.6889, while the New Zealand dollar was down 0.16% to $0.6220.
Euro support for ECB travel, Russian gas restarts; yen eyes BOJ – SABC News
Source link Euro support for ECB travel, Russian gas restarts; yen eyes BOJ – SABC News