The euro held losses from yesterday against most major peers before data forecast to show inflation in the region remained below the European Central Bank’s goal.
The common currency weakened yesterday after a report showed German inflation accelerated less than economists projected, adding pressure on the ECB to ease policy when it meets next week. Premiums on options that give the right to buy the dollar versus the yen, compared with those allowing for sales, were the highest in five months before the central banks in Japan and the U.S. meet today. The Federal Reserve is forecast to slow monthly asset purchases by $10 billion.
“The market is cautious about the euro area consumer price report after the German data came in below consensus,” said Yuki Sakasai, a currency strategist in New York at Barclays Plc. “Should the report today surprise to the downside, that would boost bets for additional easing by the ECB and weaken the euro further.”