The euro weakened for a second day against the yen amid speculation European Central Bank President Mario Draghi will use a press conference today to reiterate a commitment to keeping monetary policy accommodative.
The 17-nation currency dropped toward a five-week low versus the dollar after a euro-area report yesterday showed service activity shrank last month, even though at a slower pace. The pound fell before the Bank of England announces its first policy decision since the appointment of Governor Mark Carney. South Korea’s won rose as the government said it would boost policies to add service-industry jobs. The U.S. Labor Department releases its monthly employment report tomorrow.
“The economic data are improving but are still weak, so we think the press conference will be quite dovish,” said Marcus Hettinger, a currency strategist at Credit Suisse Group AG in Zurich. “That should be slightly negative for the euro. We’ll probably stay below $1.30 but we don’t expect a major move because we have the payrolls tomorrow.”
The euro weakened 0.3 percent to 129.59 yen at 10:29 a.m. London time after declining 0.5 percent yesterday. The common currency dropped 0.1 percent to $1.3002 after sliding to $1.2923 yesterday, the lowest level since May 29. The yen advanced 0.2 percent to 99.67 per dollar.
U.S. financial markets are shut today for the Independence Day holiday.
[h=2]‘Stay Accommodative’[/h]The ECB’s monetary policy “will stay accommodative for the foreseeable future” and policy makers stand ready to act to support growth, Draghi said in a speech in Paris on June 26. An exit remains “very distant,” he said at a press conference.
The ECB will keep its benchmark interest rate at a record low of 0.5 percent, according to all except one of 62 forecasts in a Bloomberg News survey. Draghi is due to hold a press conference at 2:30 p.m. in Frankfurt to explain the decision.
The euro has declined 2.2 percent against the dollar since June 19 when Federal Reserve Chairman Ben S. Bernanke said U.S. policy makers may start slowing the pace of bond buying, or quantitative easing, this year if the economy meets the central bank’s projections.
“The ECB statement could see an increased emphasis on forward guidance, while also highlighting an implicit contrast between the Fed’s QE tapering signal and the ECB’s accommodative stance,” BNP Paribas SA currency strategists Vassili Serebriakov and Daniel Katzive in New York wrote in a research note. “We expect a dovish message today to lead to decreased front-end yield support for the euro.”
[h=2]Pound Falls[/h]The pound declined against all of its 16 major counterparts before the nine-member Monetary Policy Committee announces it interest-rate decision.
The MPC will keep its quantitative easing target and the benchmark interest rate unchanged, according to separate Bloomberg News surveys of economists. The central bank may release a statement, something it doesn’t typically do when there has been no change in policy.
“We think we will get a statement which breaks with tradition,” said Paul Robson, a senior currency strategist at Royal Bank of Scotland Group Plc in London. “We’re not expecting sterling to react poorly to the fact that we get a statement. The data point to the economy growing, so it’s quite hard for them to justify anything too dovish at this point.”
The pound fell 0.2 percent to $1.5247 after dropping to $1.5130 yesterday, the lowest level since May 30. The U.K. currency declined 0.2 percent to 85.27 pence per euro.
South Korean Finance Minister Hyun Oh Seok said the government will provide more support to enhance employment in some “promising” areas to help fuel economic growth.
The won strengthened 0.5 percent to 1,138.45 per dollar after weakening 0.9 percent yesterday.
To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at [email protected]; Candice Zachariahs in Sydney at [email protected]
To contact the editor responsible for this story: Paul Dobson at [email protected]
The 17-nation currency dropped toward a five-week low versus the dollar after a euro-area report yesterday showed service activity shrank last month, even though at a slower pace. The pound fell before the Bank of England announces its first policy decision since the appointment of Governor Mark Carney. South Korea’s won rose as the government said it would boost policies to add service-industry jobs. The U.S. Labor Department releases its monthly employment report tomorrow.
“The economic data are improving but are still weak, so we think the press conference will be quite dovish,” said Marcus Hettinger, a currency strategist at Credit Suisse Group AG in Zurich. “That should be slightly negative for the euro. We’ll probably stay below $1.30 but we don’t expect a major move because we have the payrolls tomorrow.”
The euro weakened 0.3 percent to 129.59 yen at 10:29 a.m. London time after declining 0.5 percent yesterday. The common currency dropped 0.1 percent to $1.3002 after sliding to $1.2923 yesterday, the lowest level since May 29. The yen advanced 0.2 percent to 99.67 per dollar.
U.S. financial markets are shut today for the Independence Day holiday.
[h=2]‘Stay Accommodative’[/h]The ECB’s monetary policy “will stay accommodative for the foreseeable future” and policy makers stand ready to act to support growth, Draghi said in a speech in Paris on June 26. An exit remains “very distant,” he said at a press conference.
The ECB will keep its benchmark interest rate at a record low of 0.5 percent, according to all except one of 62 forecasts in a Bloomberg News survey. Draghi is due to hold a press conference at 2:30 p.m. in Frankfurt to explain the decision.
The euro has declined 2.2 percent against the dollar since June 19 when Federal Reserve Chairman Ben S. Bernanke said U.S. policy makers may start slowing the pace of bond buying, or quantitative easing, this year if the economy meets the central bank’s projections.
“The ECB statement could see an increased emphasis on forward guidance, while also highlighting an implicit contrast between the Fed’s QE tapering signal and the ECB’s accommodative stance,” BNP Paribas SA currency strategists Vassili Serebriakov and Daniel Katzive in New York wrote in a research note. “We expect a dovish message today to lead to decreased front-end yield support for the euro.”
[h=2]Pound Falls[/h]The pound declined against all of its 16 major counterparts before the nine-member Monetary Policy Committee announces it interest-rate decision.
The MPC will keep its quantitative easing target and the benchmark interest rate unchanged, according to separate Bloomberg News surveys of economists. The central bank may release a statement, something it doesn’t typically do when there has been no change in policy.
“We think we will get a statement which breaks with tradition,” said Paul Robson, a senior currency strategist at Royal Bank of Scotland Group Plc in London. “We’re not expecting sterling to react poorly to the fact that we get a statement. The data point to the economy growing, so it’s quite hard for them to justify anything too dovish at this point.”
The pound fell 0.2 percent to $1.5247 after dropping to $1.5130 yesterday, the lowest level since May 30. The U.K. currency declined 0.2 percent to 85.27 pence per euro.
South Korean Finance Minister Hyun Oh Seok said the government will provide more support to enhance employment in some “promising” areas to help fuel economic growth.
The won strengthened 0.5 percent to 1,138.45 per dollar after weakening 0.9 percent yesterday.
To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at [email protected]; Candice Zachariahs in Sydney at [email protected]
To contact the editor responsible for this story: Paul Dobson at [email protected]