By: Barbara Zigah
As violence erupts on the streets of Cairo, the Euro is falling against the perceived safety of the U.S. Dollar and Japanese Yen as investors beat a hasty retreat from higher risk, commodity-based currencies. As reported at 1:45 p.m. (JST) in Tokyo, the common currency slipped against the greenback to $1.3794 from yesterday’s late New York trade of $1.3810; against the Japanese Yen, the Euro dipped to 112.63 Yen, just off 112.64 Yen in U.S. late trading.
Market players expect that the Euro may fall further, depending on the ECB meeting outcome. The president of the ECB, Jean-Claude Trichet, will hold a press conference following the conclusion of the policy setting meeting, and investors are anxious to hear whether or not the ECB’s tone will change. Speculation is strong that the recent spate of positive economic data will soon lead to a hike in interest rates soon, and any deviation from that expectation will likely thrust the Euro lower. Some Tokyo-based analysts, however, believe that the ECB will continue to take a dovish stance for at least the next month.
Also meeting with the press today will be the Chairman of the U.S. Federal Reserve, Ben Bernanke, and market players will watch that keenly to assess the Fed’s commitment to their current quantitative easing efforts.