The euro held yesterday’s gain against most major peers before European Central Bank policy makers meet today amid speculation the region’s economy isn’t fragile enough to warrant an interest-rate cut.
The euro yesterday halted a five-day drop against nine developed market counterparts tracked by Bloomberg Correlation Weighted Indexes, with ECB President Mario Draghi scheduled to speak after the bank’s decision. A gauge of U.S dollar strength remained lower, after falling yesterday, before data that may show an expansion in U.S. gross domestic product slowed last quarter. Australia’s dollar dropped against its 16 major peers after employment rose less than economists predicted.
“There are a lot of people who are of the opinion the ECB won’t cut rates, and the euro has priced that in,” said Yasuhiro Kaizaki, vice president of global markets in New York at Sumitomo Mitsui Trust Bank Ltd. “There will be a lot of focus on Draghi’s news conference. Personally I don’t think the situation in Europe merits a rate cut this year.”
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