The 17-nation Eurozone currency was seen advancing against the greenback and the Japanese yen as traders forecasted a drop in the common currency and analysts predict the European Central Bank will keep its interest rate unchanged.
The Japanese yen dropped against 16 major currencies as stocks in Japan was led by Carmakers Toyota Motor Corp. lowering its demand for the currency as haven. The US dollar was seen retreating from a six-week high against the euro. Data’s examining the world’s largest economy’s growth is expected to be released tomorrow, which would also determine whether the Federal Reserve will decide to reduce its stimulus or delay tapering the $85 billion monthly bond-buying program.
“The ECB still has a much better balance sheet than the Fed, so I wouldn’t be surprised if we see some euro strength from here,” said Kara Ordway, a currency strategist at City Index Group Ltd. “I can’t see the ECB announcing anything so, as long as we don’t see any surprises from them, the euro is likely to find support around these levels.”
The euro edged 0.4% higher to 133.19 yen as of 6:54am in London, which later dropped to 132.37, the lowest since October 10. The Japanese yen weakened 0.1% to 98.61 a dollar. The MSCI Asia Pacific Index of stocks rose by 0.3%, while Tokyo’s Topix index rose 0.8%.
US Economy Growth
The report that is expected to be released tomorrow is predicted to show a growth in the U.S gross domestic product by a 2% annual rate in the third quarter. The Non-farm payrolls advanced by 120,000 employees in October after a gain of 148,000 in September; figures from the Labor Department may show.
Federal Reserve
John Williams, Fed President of San Francisco said the economic growth in the recent months have dropped below expectations
“Up until recently, I was thinking we would start seeing more of that self-powered growth in the second half of this year,” Williams said. “We’re still a long ways from where we want to be.”
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