Wednesday, 9 Jun 2010

Euro Gains Limited Ahead of the ECB Conference

The EUR gained for 2nd day against the U.S dollar and yen as stocks and commodities advanced on speculation the European Central Bank may announce plans tomorrow to stabilize the region's debt markets. The European currency earlier fell versus the greenback on speculation the ECB would leave interest rates unchanged and announce further measures to add liquidity to the financial markets. Economists forecast that the ECB may leave its key interest rate at a record low 1% until the second quarter of 2011. The EUR/USD pared gains later as the Fed released its Beige Book business survey. The U.S. economy strengthened in all 12 of the central bank's regions in April and May, it showed. Traders expect the focus tomorrow will be on the European Central Bank and what it could do to shore up sentiment. And with the market awaiting the next trigger, the EUR was caught between strong bids linked to options around $1.1900 and heavy offers expected above $1.20.