Sweden’s currency gains after central bank keeps rates steady
By Deborah Levine and Sarah Turner, MarketWatch
NEW YORK (MarketWatch) — The dollar rose on Wednesday, with markets subdued on a U.S holiday, with traders positioning for major events later this week on both sides of the Atlantic.
The dollar index DXY +0.39% , which measures the greenback against a basket of six currencies, rose to 81.893, from 81.796 in late North American trading on Tuesday.
The euro EURUSD -0.58% softened to $1.2560, from $1.2607.
Volume has fallen about 20% from the prior session, said Christopher Vecchio, a currency analyst at DailyFX
Currency markets were in a midweek lull as U.S. bond and stock markets were for the Independence Day holiday.
The European Central Bank and the Bank of England will hold interest rate meetings on Thursday.
The ECB is widely expect to lower interest rates to a record low, but there’s some debate whether policy makers will revive other easing measures, such as holding another long-term refinancing operation -- the program credited with steadying peripheral bond markets beginning late last year.
The BoE will expand its gilt-purchase program, analysts expect.
The U.S. employment report for June is due out Friday. Analysts expect it to show about 100,000 jobs were added last month -- far fewer than is deemed necessary to accelerate economic growth.
“The ECB and BoE will most likely restart easing tomorrow but since these outcomes are largely priced in, the U.S. employment report on Friday should be the greater risk event,” said Ilan Solot, a currency strategist at Brown Brothers Harriman.
Swedish krona
Also in the news Wednesday was Sweden’s central bank — the Rijksbank. Read more on Sweden’s interest rates.
A minority of analysts had expected a quarter-point cut, said Adam Cole, head of G-10 FX strategy at RBC Capital Markets.
Still, “markets are more than fully priced for a 25 basis point cut by year-end,” he wrote in a note.
The Swedish krona rose, pushing the euro to its lowest level since 2000.
The shared currency EURSEK -0.83% fell 0.8% to buy 8.68 kronor.
The dollar USDSEK -0.25% slipped 0.1% to buy 6.92 kronor.
Among other major currencies, the British pound GBPUSD -0.68% fell to $1.5620, from $1.5699.
Against the Japanese yen USDJPY +0.01% , the dollar bought 79.82 yen, compared to ÂĄ79.86.
The Australian dollar AUDUSD -0.03% traded at $1.0291, steady compared to $1.0289 on Tuesday, after stronger retail sales figures. Read more on retail sales.
Deborah Levine is a MarketWatch reporter, based in New York.
Sarah Turner is MarketWatch's bureau chief in Sydney.
