The euro steadied on Monday ahead of a meeting of the European Central Bank (ECB) on expectations that officials are beginning to consider reining in the volume of extra emergency aid they give to the euro zone economy next year.<\/p>\n
The dollar has had its best fortnight for more than a year against a basket of currencies, up 2.5 percent since the start of October, but the shift upwards in U.S. bond yields behind that move looks to be running out of steam.<\/p>\n
On the European side of the equation, the ECB is still expected at some stage to announce an extension of its quantitative easing programme past March of next year.<\/p>\n
But there is speculation that the bank, like many of its peers, is at least beginning to question the wisdom of an endless policy of money-printing and ultra-low interest rates that put persistent downwards pressure on the euro.<\/p>\n
“The market broadly sees that the ECB is going to be somewhat more positive on the outlook for Europe this week,” Citi’s G10 FX strategist in London, Richard Cochinos, said.<\/p>\n
“They still will need to announce more accommodative policy next year, but it does seem that they may also believe the need for ever greater accommodation is decreasing. That is leaving the euro positive on the (non-dollar) crosses.”<\/p>\n
The euro, which fell below $1.10 for the first time in almost three months last week, gained 0.1 percent in early London trade.<\/p>\n
The dollar index was up 0.1 percent at 98.104 after touching 98.158, its highest since March 10.<\/p>\n
Another big element of the rise in the past fortnight has been a retreat in the yen from levels around 100 per dollar. The U.S. currency was flat on the day at 104.15 yen on Monday after rising to as high as 104.480 on Friday.<\/p>\n
<\/p>\n
Source: Reuters<\/p>\n","protected":false},"excerpt":{"rendered":"
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