The euro rose against the dollar and the yen as traders speculated a recent drop in the common currency was too rapid with economists saying the European Central Bank will hold interest rates unchanged tomorrow.
The yen fell against major peers as a surge in Asian equities reduced demand for the currency as a haven. The dollar retreated from near a six-week high against the euro before data tomorrow forecast to show the world’s largest economy slowed last quarter, weighing on expectations the Federal Reserve will move to reduce stimulus. New Zealand’s kiwi climbed to its highest since Oct. 24 as employers added more jobs than forecast.
“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. in Sydney. “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.”
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