The euro traded just off 3-1/2 month lows versus the dollar on Thursday before a potentially momentous meeting of the ECB, while growth-focused currencies such as the Australian dollar gained as a global risk sell-off abated further.
The U.S. dollar index and the yen which rose earlier this week to the highest since early-April and end-May respectively, retreated as strong earnings lifted stock markets and bond yields, and induced investors to trickle out of the safe-haven assets they had piled into.
They also bought back into cryptocurrencies, with bitcoin rising further above the $30,000 mark, especially after Tesla CEO Elon Musk said the company would “most likely” resume accepting bitcoin for payment.
No new measures are anticipated from the European Central Bank but following on from the inflation target tweak, odds have risen on policymakers promising to retain support for longer and even to add more bond-buying.
The euro traded at $1.1790 by 0800 GMT, just off the early April lows of $1.1752 touched on Wednesday. The ECB’s dovish pivot at a time when many peers are mulling exiting pandemic-era stimulus is expected to keep the single currency under pressure.
The dollar index =USD, which measures the currency against six major peers, slipped to 92.75 after pulling back from a 3-1/2 month high of 93.194 touched on Wednesday.
The yen, another safe-haven, was at 130 per euro, from an almost four-month top of 128.610 hit this week, and was flat versus the dollar at 110.3 yen.
The Australian dollar changed hands at $0.73675, from an eight-month low of $0.72895 the previous day, despite half the Australian population being under COVID lockdowns.
· EUR/USD clings to 1.18 ahead of all-important ECB meeting
EUR/USD is hovering around 1.18 as the clock ticks down to the ECB's first policy announcement after unveiling its more dovish strategic review. ECB President Lagarde is set to make changes to communications and perhaps to policy. Covid headlines are eyed
Reference: FXStreet, Reuters
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