The euro rose against the dollar and the yen, snapping a drop from yesterday, as European Central Bank policy makers meet for the first time since President Mario Draghi pledged to do whatever is needed to protect the currency.
The pound dropped for a third day against the euro as the Bank of England Monetary Policy Committee kept its bond-buying program and interest rates unchanged. The U.S. currency fell versus 13 of its 16 major counterparts even after the Federal Reserve yesterday refrained from expanding monetary easing. Sweden’s krona and Norway’s krone strengthened.
ECB officials meeting in
Frankfurt will keep the benchmark interest rate at a record low 0.75
percent, according to 51 of 55 economists in a Bloomberg News survey.
Photographer: Hannelore Foerster/Bloomberg
3:16
Aug. 1 (Bloomberg) --
Georgios Tsapouris, an investment strategist at Coutts & Co., Steven
Bell, chief economist at GLC Ltd., Graham Neilson, chief investment
strategist at Cairn Capital Ltd., and Christian Schulz, senior economist
at Berenberg Bank, talk about European Central Bank President Mario
Draghi and the outlook for monetary policy.
Alberto Gallo, head of European macro credit research at Royal Bank
of Scotland Group Plc, James Ashley, a senior economist at RBC Capital
Markets and Johannes Jooste, a strategist at Bank of America Corp.'s
Merrill Lynch Wealth Management unit, also speak. (Source: Bloomberg)
The euro advanced 0.4 percent to $1.2273 at 12:03 p.m. London time after dropping 0.6 percent yesterday. The 17-nation currency appreciated 0.1 percent to 96.02 yen. The dollar weakened 0.3 percent to 78.23 yen.
ECB officials meeting in Frankfurt will keep the benchmark interest rate at a record low 0.75 percent, according to 51 of 55 economists in a Bloomberg News survey. Four predict a cut to 0.5 percent. The deposit rate will be left at zero, a separate Bloomberg survey shows.
Draghi will hold a press conference at 2:30 p.m. in Frankfurt to explain the central bank’s decision. Any new measures will also be announced then.
High Expectations
“A lot of people are expecting the ECB to announce some sort of ‘shock-and-awe’ policy today,” said Peter Dragicevich, a Sydney-based foreign-exchange economist at Commonwealth Bank of Australia. (CBA) “If the ECB were to disappoint, we expect the euro to fall.”The Federal Open Market Committee “will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability,” U.S. policy makers said yesterday in a statement at the end of a two-day meeting. Investors had speculated the central bank may signal a third round of asset purchases or so-called quantitative easing.
The U.S. central bank bought $2.3 trillion of securities in two rounds of asset purchases from 2008 to 2011 in a bid to spur growth through lower borrowing costs, and it has said its benchmark interest rate will stay at “exceptionally low levels” at least through late 2014.
U.S. Hiring
The pace of hiring in the U.S. in July will fail to cut the unemployment rate from 8.2 percent, economists said before a Labor Department report tomorrow. The data will show employers added 100,000 jobs last month, according to the median forecast in an economist survey. Employers added an average of 226,000 a month from January through March.“The FOMC changed the statement fractionally, to downgrade the economic outlook and insert the code-word for policy action at the next meeting,” Emma Lawson, a Sydney-based currency strategist at National Australia Bank Ltd. (NAB), wrote in a note to clients. “If we see more reports that are soft, then if the last two QE cycles are an example, then the dollar can move lower into the meeting and rally afterwards.”
The pound fell against most of its major peers as the Bank of England announced its decision. The Monetary Policy Committee maintained its bond-buying program at 375 billion pounds and left interest rates at a record-low 0.5 percent, in line with the median forecasts in Bloomberg News surveys.
Sterling weakened 0.2 percent to 78.88 pence per euro after dropping to 79.07 pence, the lowest level since July 13.
The euro has depreciated 4.5 percent in the past six months, the worst performance of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen gained 0.2 percent and the dollar strengthened 3.1 percent.
The Swedish krona rose 0.5 percent to 6.7689 per dollar, while Norway’s krone climbed 0.3 percent to 6.0249.
Reymount Investment Products & Services:
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.