By: Barbara Zigah
In what is expected to be a lackluster trading day across the forex markets, the common currency Euro held steady, close to a 10-day hike, on renewed speculation of an ECB rate hike. As reported at 1:49 p.m. (JST) in Tokyo, the Euro was trading against the U.S. Dollar at $1.3688, unchanged from Friday’s late trade in New York; earlier in the trading day, it had struck $1.3727, a 1-week high, following comments from Lorenzo Bini Smaghi, an ECB board member, who said that the central bank was poised to raise interest rates should inflationary pressures warrant it. One analyst noted that if the Euro breaks resistance at $1.3750, it could push the common currency into a new range, but in today’s trading at least, it appears to lack that resolve.
What is expected to help the Euro is pressure on U.S. bond yields if they continue to fall it is anticipated that a U.S. Dollar sell-off will ensue. U.S. Treasury bond yields have been falling now that hopes of an interest rate increase seem more remote. The U.S. Dollar Index, which gauges the greenback’s value against major currencies, was steady at 77.635 .DXY, just off the February 9th low of 77.04 .DXY.