Investors look for tips regarding future monetary easement
San Francisco, CA -- (SBWIRE) -- 01/14/2013 -- The dollar and yen fell against the euro on Thursday after a strong demand for Spanish bond auction pushed the euro. Further gains were limited before the European Central Bank interest rate decision, however.
The currency rose to a high against both the dollars and the yen, exceeding its target range of 4- to 5-billion euros.
The euro rose rose to $1.31065, from $1.3085 before the auction results, and was up a 0.3% mark on the day. Traders reported a stop-loss for orders at $1.3110 and $1.3115.
The euro also hit its high against eh yell at 1150, close the the 115.995 it reached in January, which was a 18-month high. It was last up 0.5% at 114.35 yen.
"The Spanish bond auction was better than expected and that saw the euro rise," said Alexandre Dolci, FX strategist at BBVA.
"But the market is awaiting signals from the ECB over how serious it is on delivering further near-term policy easing. Depending on the rhetoric used in the press conference, the euro is either going to hold the $1.31 ground or to slip back towards $1.30."
While the ECB was expected by most to ocntinue a hold rates when it meets on Thursday, certain traders have positioned for a risk of a possible impending rate cut.
ECB President Mario Draghi has set a press conference within his schedule and investors will keep a wary eye on indications of easing in monetary policy that could be be in the cards. If there are no hints to be had, the euro may well edge up.
Bids from Asian central banks were likely to limit any falls in the euro.
"The euro has struggled to sustain any rallies past $1.30-$1.40 in the past few weeks. With economic data out of the euro zone not looking good, it is difficult to construct a bullish story for the euro," said Peter Kinsella, currency strategist at Commerzbank.
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