BLBG: Euro Rally Versus Dollar to ‘Quickly Fade,’ Bank of Tokyo Says
The euro’s gain against the dollar may come to a rapid end, Bank of Tokyo-Mitsubishi UFJ Ltd. said.
The European Central Bank “is not buying the deflation risk arguments at all and is likely to indicate some caution tomorrow,” Derek Halpenny, European head of global currency research in London, wrote in a report today. “We expect a 50 basis-point cut but would not be surprised if a subtle hint of a pause was also signaled. Although a clear mistake in our view, the euro may well derive support from this scenario initially, but like the false rally in December, will quickly fade.”
Europe’s common currency was at $1.3217 as of 9:40 a.m. in London, from $1.3182 yesterday.
