Euro treads water ahead of key ECB meeting

 

TOKYO : The euro treaded water in Asia Wednesday after surprisingly upbeat data suggested the eurozone’s economy may be in better shape than previously thought, casting doubt on the likelihood of more European Central Bank easing measures.

Sitting around a seven-month low against the dollar, the 19-nation currency has been pushed down by expectations that the ECB would unleash fresh stimulus after its meeting on Thursday.

Those bets took a hit on Tuesday after the positive eurozone manufacturing and jobless figures.

But analysts said the data were likely not enough to change policymakers’ minds as persistent economic weakness keeps alive hopes for more ECB measures.

“Regardless of the data, the ECB cannot afford to disappoint on Thursday,” Marco Valli, chief euro-area economist at UniCredit SpA, told Bloomberg News.

“The stage has been set for (ECB chief Mario) Draghi to take action.”

In Tokyo trading, the euro slipped to $1.0618 from $1.0634 in New York, while it was flat at 130.64 yen against and 130.65 yen.

The dollar, meanwhile, rose to 123.07 yen from 122.86 yen Tuesday in New York and gained against some other Asian currencies including the Taiwan dollar, Indian rupee and Philippine peso.

The greenback has been supported by expectations that the Federal Reserve will move on a long-awaited interest rate hike at its December meeting.

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