Euro Drops on Speculation over ECB Stimulus Rollout

0
147

Euro Drops on Speculation over ECB Stimulus RolloutThe euro fell versus the dollar on bets the European Central Bank will boost stimulus in order to revive economic growth in the euro zone. The 18-nation currency fell against its peers after the ECB purchased covered bonds for the second consecutive day and Reuters announced that it is mulling purchasing corporate debt.

The currency fell 0.6 percent to trade at $1.2729 at 12:41 p.m. in New York after earlier rising to 1.2886 on Oct. 15, its strongest level since Sept. 23. The shared currency dropped 0.8 percent to 135.76 yen. The U.S. currency fell 0.3 percent to steady at 106.65 yen after jumping 1 percent over the past three days.

“Draghi de-emphasized the balance-sheet expansion at their Oct. 2 meeting, so anything that gives even a hint or a whiff of balance expansion is going to cause some pretty sharp moves in the euro,” Jennifer Vail, a Minneapolis-based head of fixed income at U.S. Bank Wealth Management, told Bloomberg News. “The rumor was corporate bonds, not covered bonds, so that would be something new for the ECB.”

Meanwhile, Canada’s dollar surged after prices of crude oil, which account for a huge proportion of the country’s exports, rose after the Chinese economy expanded 7.3 percent in the three months through September from a year ago. Economists surveyed by Bloomberg had expected a growth rate of 7.2 percent.

The loonie jumped 0.7 percent to C$1.1208 per U.S. dollar after crude-oil futures appreciated 0.3 percent to trade at $82.97 per barrel in the U.S. financial capital of New York. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com