Thursday, 5 Aug 2010

Euro Trades near 3 Month High before ECB Meeting

The euro stayed near a 3 month high against the U.S dollar on speculation the European Central Bank (ECB) may express optimism about the region's economic recovery. The euro also benefited from data showing German industrial orders data rose 3.2% in June, surpassing expectations thanks to strong foreign demand. The European Central Bank (ECB) and the Bank of England (BOE) announce policy decisions on Thursday, but both are fully expected to leave interest rates on hold at record lows of 1.0% and 0.5% respectively. The euro reached an 8 week high the last time European central bank policy makers met, after ECB President Jean-Claude Trichet said the economic recovery was gaining momentum. If this materializes, according to analysts it should lift the euro versus the greenback beyond the $1.3285 level. Trading was choppy, however, with investors cautious ahead of key U.S. non-farm payrolls figures on Friday, which are expected to provide near-term direction for the euro/dollar.