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Euro Drifts Towards 1.35 Before ECB Meeting

The euro traded 0.5 percent from a one-week low versus the dollar before European Central Bank policy makers meet today amid political turmoil that threatens to renew the region’s sovereign-debt crisis.

The 17-nation currency weakened from its highest since April 2010 against the yen before Spain prepares to auction bonds today amid calls for Prime Minister Mariano Rajoy to resign. ECB President Mario Draghi may indicate concern the economy is weak even as the bank hold rates, according to analysts. New Zealand’s dollar was lower, after falling yesterday, as a report showed the nation’s payrolls unexpectedly shrank for a third quarter.

“Given the euro’s strength, Draghi is likely to remind us that the economy is still weak rather than giving some optimistic comments,” said Kikuko Takeda, a senior currency economist in London at Bank of Tokyo-Mitsubishi UFJ Ltd. “I see the euro falling at a modest pace in the mid- to long-term.”

Bloomberg [1]

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