ECB President Mario Draghi will speak at news conference
By Virginia Harrison
LONDON (MarketWatch) — The euro edged higher against the U.S. dollar on Thursday after the European Central Bank lowered interest rates.
The euro EURUSD +0.21% traded at $1.3416 compared with $1.3405 in North American trade late Wednesday.
The ECB cut its key lending rate by 25 basis points to 1%, as expected. Traders are now awaiting ECB President Mario Draghi’s press conference, due to begin at 8:30 a.m. Eastern time.
Separately, European leaders were due to meet in Brussels on Thursday for a two-day summit billed as crucial for the debt-stricken region. German Chancellor Angela Merkel and French President Nicolas Sarkozy have proposed broad treaty changes that would toughen fiscal rules and impose automatic sanctions on countries that violate budget limits.
“There will be plenty of attention on the ECB to determine whether they will give a little more ground and provide further assistance to the euro-zone periphery,” said Mitul Kotecha, head of global FX strategy at Credit Agricole.
Kotecha said that if “the ECB hints at intensifying its securities-market purchases of euro-zone bonds this will likely bode well for the euro.”
The Bank of England left interest rates and its asset-buying program unchanged Thursday. The British pound GBPUSD +0.28% edged up to $1.5732, from $1.5701 in North American trade late Wednesday.
Against the Japanese currency, the dollar USDJPY -0.61% traded at ¥77.35, from ¥77.68 in North American trade late Wednesday.
The dollar index DXY -0.17% , which measures the U.S. unit against a basket of six major rivals, traded at 78.331, down from the 78.476 level in North American trade late Wednesday.
