Currencies Overview: Euro Rising Before The ECB Meeting

The euro rose ahead of a meeting of the European Central Bank to be held later on Thursday, April 22nd, as any positive comments on the economic outlook or hints of a reduction in bond purchases are expected to push the single currency up rapidly.

The European Central Bank is not expected to adjust its policy when it meets later on Thursday, but analysts say this meeting will pave the way for another in June, when policymakers are expected to decide whether to slow down bond purchases.

The euro was trading at $1.2033, up 0.1% during the session and not far from its strongest level since the third of March. The common European currency has gained up to 3% against the dollar since the beginning of April.

The euro’s gains pressured the dollar, which fell to 107.87 yen, near its lowest level in seven weeks.

The dollar is near its lowest level in several weeks against most major currencies as it reduces the dissipation of US Treasury yields and the interest-rate advantage over the dollar.

The sentiment is weakening towards the dollar, as the rise last month in Treasury yields reversed its course, but some analysts say that the longer-term outlook remains positive due to the strength of the US economy and the progress of vaccination campaigns against the Coronavirus.

The pound sterling was $1.3938, up 0.1% during the session. The yuan rose in internal trading to 6.4820 against the dollar, reaching its strongest level since March 12.

And the Canadian dollar recorded in the last session 1.2494 against its US counterpart, to stabilize during the session. The Canadian dollar rose to its highest level in six weeks on Wednesday.

The Australian and New Zealand dollars traded near a one-month high against the US dollar, supported by speculation that the two countries’ central banks are increasingly likely to follow the Canadian model due to improved economic outlook.