BLBG:Euro Rises as Spain Sells Debt Before ECB Meeting
The euro rose for the first time in three days against the dollar after Spain sold more than the maximum target at its first debt auction of the year, underscoring demand for the region’s assets.
Europe’s shared currency climbed toward an 18-month high against the yen. The European Central Bank will keep its main refinancing rate at a record-low 0.75 percent today, according to 50 of 55 analysts in a Bloomberg News survey. The ECB will announce the decision at 1:45 p.m. in Frankfurt. Japan’s currency weakened for a second day against the dollar on speculation policy makers will boost stimulus that tends to weaken the currency.
“The euro has rallied with decent bond sales from Spain,” said Peter Frank, global head of foreign-exchange strategy in London at Banco Bilbao Vizcaya Argentaria SA. (BBVA) “There’s not really appetite for a rate cut yet. The market will be looking to the press conference. If Draghi is less dovish than in December we could see a bit more support for the euro.”
The euro advanced 0.3 percent to $1.3101 at 10:49 a.m. London time, after dropping 0.4 percent in the previous two days. Europe’s shared currency gained 0.5 percent to 115.39 yen, after reaching 115.99 on Jan. 2, the most since July 2011. The yen fell 0.2 percent to 88.05 per dollar.
Spain’s Madrid-based Treasury raised 5.82 billion euros in the sale of three bonds, including a new two-year security with so-called collective-action clauses limiting investors’ rights to oppose writedowns. The upper target for the sale was 5 billion euros.
Five analysts predict the ECB will cut its main refinancing rate to 0.5 percent, according a Bloomberg News survey. President Mario Draghi will hold a news conference to explain the decision at 2:30 p.m. in Frankfurt.
Europe’s shared currency dropped 0.8 percent against the dollar after the ECB’s last decision on Dec. 6 when Draghi told reporters that policy makers had a “wide discussion” on rates and said economic weakness will persist.
To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
