Euro Remains Lower Before ECB Meeting

The euro remained lower following a decline yesterday amid speculation the European Central Bank will use its meeting tomorrow to signal future economic stimulus.

The yen fell as the Bank of Japan starts a two-day gathering at which it’s expected to increase monthly bond purchases to combat deflation.

“A rate cut is still an option for the ECB, so we can’t willingly buy the euro yet,” said Yoshitsugu Fujita, an assistant vice president of global markets in New York at Sumitomo Mitsui Trust Bank Ltd. “Traders want to close their long dollar-yen positions before the BOJ meeting, which is a big event.”

The euro was little changed at $1.2806 as of 10 a.m. in Tokyo after losing 0.2 percent to $1.2820 yesterday. The yen slid 0.2 percent to 93.61 per dollar and fell 0.1 percent to 119.86 per euro.

Data yesterday showed the euro-area jobless rate rose to a record 12 percent in early 2013, adding to signs that the currency bloc’s recession extended into the first quarter. The ECB, which has held its key rate at 0.75 percent since July, forecasts the economy will shrink 0.5 percent this year.

(Source: Bloomberg)