WSJ:Euro Lower in Asia Amid Caution Ahead of Comments By ECB's Draghi
By TATSUO ITO
The euro was lower against the yen and the dollar in Asia Thursday, as traders looked cautiously toward remarks by European Central Bank President Mario Draghi later in the day following the ECB's policy-setting meeting.
Markets expect no change in the ECB's monetary policy amid rises in short-term interest rates as concerns ease toward the euro-zone financial crisis. But traders are keeping a close eye on whether Mr. Draghi indicates a future change in monetary policy, and how he assesses the euro's recent strength.
"There's caution ahead of the ECB," said Minori Uchida, chief forex analyst at the Bank of Tokyo-Mitsubishi UFJ, adding that such wariness is weighing on the single currency.
"A question is if Mr. Draghi refers to the value of the euro amid differing positions between Germany and France," Mr. Uchida said.
At 0450 GMT, the euro was at ¥126.23 from ¥126.63 late in New York Wednesday. The common currency was $1.3509 against $1.3523, while the dollar was at ¥93.44 versus ¥93.62.
On Tuesday, French President Francois Hollande voiced concerns that the euro's current strength was undermining efforts by European governments to improve their economies. But that went against a differing view from Germany, which argued that exchange-rate policy isn't an appropriate instrument to increase competitiveness.
"If Mr. Draghi shows concerns about the recent euro levels, euro-selling for yen may push the dollar down to ¥93, where stop-loss sales are expected," said Yuji Saito, director of foreign exchange at Credit Agricole ACA.FR -3.71% in Tokyo.
"The focus is on whether Mr. Draghi fine-tunes the hawkish views on monetary policy he expressed last month," Mr. Saito addded.
He said another focus is the outcome of G-20 finance ministers meeting in Moscow next week, and on Japanese Prime Minister Shinzo Abe's visit to the U.S. later this month.
"I expect the U.S. to endorse Japan's economic policy (of monetary easing and flexible fiscal steps), but would like to confirm the U.S. view, as the dollar's rally has been brought about by perceptions that Washington can tolerate (the yen's decline)," Mr. Saito said.
The Wall Street Journal Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 71.335 against 71.167.
