The euro rose to its highest level in nearly a year versus the dollar on bets the European Central Bank officials will provide additional details of further stimulus once it concludes its meeting today.
The shared currency dropped 0.1 percent to trade at $1.3135 at 12:13 pm in London after earlier touching $1.3110 on Sept. 2, its lowest level since Sept. 6, 2013. The dollar advanced 0.2 percent to 104.97 yen after rising to 105.31 yen, its strongest level since Jan. 10. The euro held steady at 137.89 yen.
The yen tumbled after Bank of Japan Governor Haruhiko Kuroda expressed confidence that a stronger U.S. dollar isn’t bad for the country.
“The market is looking for the ECB and BOJ to raise stimulus down the line, and the Fed to reduce it,” Neil Jones, a London-based head of hedge-fund sales at Mizuho Bank Ltd., told Bloomberg News. “The foreign-exchange market is acting accordingly. The U.S. economy is looking better, and global confidence in U.S. assets both as a haven and an investment remains healthy.’’
Most analysts polled by Bloomberg News are confident that ECB will retain its record-low interest rates at 0.15 percent, with 44 percent of them expecting it to roll out a quantitative-easing program in 2014 or 2015.
The U.S. dollar rose before the release of August payrolls data by ADP Research Institute later today. Analysts forecast U.S. service industry grew at its strongest pace since 2005 in August, ahead of the release of the data today by Institute for Supply Management.
Meanwhile, Sweden’s krona rose after the Riksbank retained its main interest rate in belief that its 0.5 point reduction in the rate in July is sufficient to spur inflation. The krona rose 0.2 percent to 9.1954 per euro and was slightly unchanged at 7.005 per dollar.To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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