Currencies: Euro rises slightly against the dollar in a tight market before the ECB
London (awp / afp) – The euro gained some ground against the dollar on Wednesday in cautious market swayed by speculation over the details of a massive program of asset purchases could announce Thursday that the European Central Bank (ECB).
By 1700 GMT (1800 CET), the single European currency was worth 1.1590 dollars , 1.1553 against the dollar Tuesday at 2200 GMT.
The euro retreated in contrast against the Japanese currency to 136.53 yen against 137.24 yen Tuesday.
dollar also fell against the Japanese currency to 117.80 yen against 118.80 yen Tuesday.
“Monetary policy continues to play a leading role in the foreign exchange market, while the latter takes becoming more and more important for central banks, “noted Carl Hammer, analyst at SEB.
The market was buzzing Wednesday speculation about the details of a massive program of public debt redemptions by the ECB , a last resort to try to leave the prices and the economy, and whose announcement Thursday appears to many observers a done deal.
According to press reports published Wednesday, the Executive Board of the Bank European Central Bank (ECB) would support the implementation of a massive program of asset purchases amounting to € 50 billion per month until the end of 2016.
“If the QE (“Quantitative easing” quantitative easing, ie) turns out to be 50 billion a month over a year, it would be very disappointing. This amount corresponds to the lower area of the terminal estimates of economists is between 500 billion and 1,000 billion euros, “commented Christopher Dembik, an analyst at Saxo Bank, which” one would be far bazooka expected by some. “
” But it is not impossible, judging by the rumors that the program is spread over a longer period of 18 months for example. In this case, it would be a great surprise since talk of $ 900 billion. QE would undoubtedly be credible to the market, “explained Mr. Dembik.
The asset purchases by the ECB, whose purpose is to stimulate economic activity through injections liquidity in the financial system, would have the side effect of diluting the value of the single currency and should therefore continue to make it unattractive to investors.
The euro has suffered from this perspective in recent weeks falling even in mid-January to 1.1568 dollars, its lowest level since mid-November 2003.
Carl Hammer, “the euro is not low enough to address the risks deflation and low economic growth plaguing the euro zone. “For the analyst,” the ECB will have to ease monetary policy sooner than currently anticipated, which will continue to weigh on the single currency. “
If the ECB were to disappoint market expectations, the euro could recover, but this move would be temporary because “it would increase the pressure (the ECB) to act again in the coming months, “abounded Kathleen Brooks, an analyst at Forex.com.
In this context a wait on the eve of the decision of the ECB, traders digested the surprise announcement by the Central Bank of Canada lowering a quarter point from its key rate to 0.75%, due to the potential for economic growth posed by the falling oil prices.
Thus, new major central bank surprised market expectations, less than a week after the shock wave had created the Swiss National Bank (SNB) by removing the floor price at which it maintained its currency against the euro.
The Bank of England (BoE) has also been more cautious than before the start of this year, with a return to the unanimity of the nine members of the Monetary Policy Committee to maintain the rate director of the institution to 0.50%, while the five previous decisions had seen two members voting for a rate hike.
For some observers, the BoE should thus refrain from raising its rates before 2016, whereas previously they expected the first increase by the end of 2015.
In contrast, the US Federal Reserve (Fed) should adopt in the coming months, given good performance of growth and employment in the United States, a more aggressive policy.
The next Fed Monetary Committee will meet on January 27 and 28, but a rate hike is excluded at least until April, when the rates are kept close to zero since the end of 2008.
By 1700 GMT, the British pound fell against the single European currency at 76.61 pence, as against the dollar at 1.5126 dollar for a book.
The Swiss franc rose against the euro at 0.9975 Swiss francs per euro, as against the greenback at 0.8607 franc to the dollar.
The Chinese currency finished at 6.2123 yuan to the dollar, against 6.2137 yuan yesterday.
The ounce of gold finished in 1293 , $ 50 at the evening fixing – after climbing to 1:10 p.m. GMT 1306.23 dollars, its highest level in five months. – Tuesday against 1288.75 dollars
Wednesday Courses Tuesday
1700 GMT 2200 GMT
EUR / USD 1.1590 1.1553
EUR / JPY 136.53 137.24
EUR / CHF 0.9975 1 , 0119
EUR / GBP 0.7661 0.7627
USD / JPY 117.80 118.80
USD / CHF 0.8607 0.8756
GBP / USD 1.5126 1.5147
afp / fah
(AWP / 21.01.2015 6:31 p.m.)
(AWP / 01.21.2015 6:31 p.m.) ^ ->
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