By: Barbara Zigah
Investor hopes were all but dashed for a rate hike from the ECB later this week following
the release of lackluster data from the German industrial sector. In Asian trading today
the common currency Euro paused just off a 2-week trough against the U.S. Dollar.
Investors expect the recent return from holiday of Asia’s central banks to boost Euro
buying.
As reported at 2:39 p.m. (JST) in Tokyo, the Euro was trading against the
greenback at $1.3610, a .2% rise from late trading in New York, and well above the
$1.3508 2-week low struck yesterday. One FX strategist commented that the Euro
can find more support, provided however that the ECB provides a hawkish platform.
Analysts are not predicting a rate increase from the ECB, believing instead that they
will insist that inflation can be well managed given the current monetary tools at their
disposal.
The Bank of England is also holding a rate setting meeting this week and, like the ECB’s
expected position, will is not likely to raise interest rates. Nonetheless, the Pound
Sterling is benefitting from investors’ expectations of one, with the Pound moving up
against the U.S. Dollar to $1.6135, a .15% gain.