BS: Euro Gains Versus Dollar Amid Bets ECB Action Will Spur Economy
The euro climbed against the dollar, reversing earlier losses, amid speculation that action by the European Central Bank this week will bolster the 17- nation region’s economy.
The common currency declined earlier versus most major peers as the region’s jobless rate rose to a record and inflation slowed, adding to signs the currency bloc is struggling and fueling bets the ECB will cut interest rates May 2. The Federal Reserve starts a two-day meeting today.
“If it’s running up, it’s because the market is optimistic the ECB will do something beyond the rate cut,” Steven Englander, head of Group of 10 currency strategy at Citigroup Inc. in New York, said in a telephone interview. “The battle is being fought over what kind of additional stimulus the ECB is likely to provide. The more the market anticipates additional stimulus through credit channels and so on, the stronger the euro will trade.”
The euro rose 0.4 percent to $1.3152 at 10:08 a.m. New York time and touched $1.3159, the strongest level since April 17. It has advanced 2.7 percent this month. The common currency was little changed at 128.14 yen after falling 0.7 percent earlier. The Japanese currency added 0.4 percent to 97.40 per dollar.
To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
