The euro slid to a two-month low on Wednesday, as markets waited to assess the European Central Bank’s position on policy amid effervescent expectations that it could ultimately lower rates of interest and be part of the global easing development.
The common currency was 0.05% down at $1.1145 after hitting $1.1143, its lowest since May 31. It had already lost over 0.5% the previous day and shed practically 0.7% to date this week.
The euro’s drop has hastened ahead of the ECB’s policy meeting on Thursday. Whereas markets have pared their bets the central bank would reduce rates by ten basis points, they still count on dovish guidance, paving the best way for alleviating in September.
“Attempts throughout the currency market to price in dovish moves or language by the ECB have found speed over the last few days, resulting in the euro’s steep drop,” mentioned Yukio Ishizuki, a senior currency strategist at Daiwa Securities.
The euro was further seen weighed down because the pound slumped towards a two-yr low after Boris Johnson on Tuesday won the race to be the subsequent British prime minister and increased the specter of a no-deal Brexit.
Sterling was a contact lower at $1.2433, on track for its fourth straight day of losses and edging nearer $1.2382; the two-year trough touched last week.
The greenback floated close to a one-week high of 108.290 yen scaled in a single day, supported by an increase in U.S. Treasury yields as investor risk reluctance declined following some progress in U.S.-China trade discussions.
U.S. Trade Consultant Robert Lighthizer and senior U.S. officers will travel to Shanghai on Monday for face-to-face trade conferences with Chinese officers, sources said.
The greenback index edged as much as a five-week high of 97.755, following gains of almost 0.5% yesterday.