Euro stalls as markets await central banker’s assessment
By William L. Watts and Lisa Twaronite, MarketWatch
LONDON (MarketWatch) — The dollar edged up on most major currencies Thursday as traders awaited Jean-Claude Trichet’s monthly news conference for any signs that the European Central Bank is moving closer to pulling the trigger on an interest-rate hike for the euro zone.
The dollar index (DXY 76.78, +0.11, +0.14%) , which measures the U.S. unit against six major currencies, rose to 76.722 from 76.685 late Wednesday.
Trichet, president of the European Central Bank, will meet with reporters at 8:30 a.m. Eastern time. Earlier, the central bank announced it had left its key lending rate unchanged at 1%, a record lower, as had been expected. Read more about the rate decision and economists’ inflation analysis for the euro zone.
The euro (EURUSD 1.3844, -0.0021, -0.1514%) saw little movement in the wake of the rate announcement, changing hands in recent action at at $1.3850, down from $1.3861 in North American trading late Wednesday. See real-time currency quotes and tools.
“On the view that the market may have got ahead of itself in pricing in rate hikes, Trichet may have a difficult line to tread,” said Jane Foley, senior currency strategist at Rabobank.
Trichet will likely emphasize an expected hike in inflation projections made by staff at the Frankfurt-based central bank, but he will probably also want to avoid encouraging the view that it’s in position to hike rates aggressively this year, she said.
Investors also awaited the 8:30 a.m. Eastern release of weekly U.S. jobless-claims data, hoping for clues as to what crucial data on nonfarm payrolls for February might show.
Meanwhile, the dollar got a lift as crude-oil futures came off earlier highs on reports of a possible plan to end the fighting in Libya. See more on New York-traded oil futures trending back toward $100 mark.
Reuters reported Arab League Secretary-General Amr Moussa said Libyan leader Moammar Gadhafi had agreed to a plan proposed by Venezuelan President Hugo Chavez to seek a negotiated settlement with rebel forces.
Investors’ risk appetite “caught a small boost” after the report, said Michael Turner, a strategist at RBC Capital Markets.
Also Thursday, the dollar (USDYEN 81.8900, +0.0500, +0.0611%) bought 81.82 Japanese yen, compared with ¥81.90 late Wednesday.
The British pound (GBPUSD 1.6268, -0.0055, -0.3369%) fell to $1.6283 from $1.6329.
The Australia dollar (AUDUSD 1.0173, +0.0007, +0.0688%) rose slightly to US$1.0178, up from US$1.0172.
