EUR/USD Steady Around 1.16 Before ECB

The euro headed toward its lowest level in more than 11 years against the dollar as the European Central Bank prepares for a meeting at which policy makers are forecast to buy sovereign bonds under quantitative easing.

The Australian and New Zealand dollars held losses from yesterday after the Bank of Canada unexpectedly cut interest rates, spurring speculation that the South Pacific nations’ central banks will favor looser monetary policy. The 19-nation shared currency pared gains against the dollar in New York after Bloomberg News reported that two central-bank officials said policy makers led by Mario Draghi will propose purchasing 50 billion euros ($58 billion) in assets per month through 2016.

“The euro decision is kind of well telegraphed but euro-dollar does have more to go on the downside,” said Thomas Averill, a managing director in Sydney at Rochford Capital, a currency and rates risk-management company. “The euro-zone economy seems pretty sluggish at the moment and needs QE.”

Bloomberg

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