Dollar firms, ECB meeting in focus
The U.S. dollar firmed against the euro on Tuesday but held in its tight recent range before the European Central Bank on Thursday is expected to cut interest rates deeper into negative territory and possibly restart asset purchases.
Investors are weighing whether further monetary stimulus will be effective in countering economic weakness in the euro zone, and whether the ECB will disappoint dovish expectations baked into the market. People are waiting on the ECB, that’s really the big event this week, said Erik Nelson, a currency strategist at Wells Fargo in New York. But, given some of the pushback we’ve seen from the hawks on the board, we could easily see a disappointing outcome
Dollar supported in cautious trade ahead of ECB meeting
Investor focus for now is centered on the European Central Bank’s meeting on Thursday. Expectations it will push interest rates even further into negative territory have weighed on the euro, which has shed 3% since June.
Gold prices inch higher, all eyes on ECB meeting
Gold prices edged higher on Wednesday, snapping a four-day losing streak on technical buying, while investors awaited European Central Bank’s meeting where it is widely expected to cut interest rates.
“The ECB is expected to reduce further the interest rate into negative territory… The meeting could serve as a potential catalyst (for gold) and investors are already buying into the rate cut expectations,” said Margaret Yang Yan, a market analyst at CMC Markets.
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