Euro Inches Up On Dollar Before ECB Meet

The euro edged higher against the U.S. dollar as the markets watched out for the European Central Bank to announce a policy stimulus measure amid a fair degree of skepticism.

The ICE dollar index DXY, which measures the greenback against a basket of six major global currencies, dropped to 82.953 from 83.07 in North America late on Wednesday.

The WSJ dollar index BUXX, which gauges the greenback moves against some of the other heavily traded currencies, rose to 71.96 from 71.74.

The euro EURUSD was changing hands for $1.2263, compared with $1.2232 in New York trade, where it lost ground after the Federal Reserve kept its low interest rate unchanged, and decided not to take any action.

“One central bank down, two to go, although the Bank of England meeting should not surprise us with any new policy initiatives,” said Chris Weston, an institutional dealer at IG Markets.

“Expectations for aggressive policy moves from the ECB were certainly elevated, but given the stance of the Germans over the last couple of days, some of the fast money has exited risk assets, as traders come to terms that inaction by Mario Draghi and his team will cause a sharp sell down in equities, commodities and risk forex,” Weston said.

Societe Generale, meanwhile, found in a survey of clients that 69% of those polled think the ECB will disappoint after its meeting Thursday. Among those surveyed, 50% of the banks, 68% of the hedge funds, 71% of asset managers and all corporate clients said they the ECB won’t meet expectations.

Among other major currency pairs, the dollar USDJPY was trading at ¥78.456 against the Japanese unit, compared with ¥78.43.

The British pound GBPUSD was changing hands for $1.5534 from $1.5552, while the Australian dollar AUDUSD was buying $1.0481, compared with $1.0466.

Marketwatch