Central Banks’ Policy Decisions Loom

The Euro slipped against both the greenback and the Japanese Yen during Asian trading hours as investors take a wait and see approach ahead of the European Central Bank’s policy meeting decision which will be announced later today. Analysts don’t expect that Mario Draghi and his cronies will make any changes to current policy, but are anxious to hear at the press conference which follows whether the ECB will take on a more dovish posture than previously seen. As reported at 1:04 p.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.3506, a loss of 0.1% and close to Tuesday’s low of $1.3458; less than one week ago the pair had struck $1.3711, a fresh 15-month peak. The EUR/JPY pair dropped 0.3% to trade at 126.22 Yen, well off 127.21, the 34-month peak struck just yesterday.

The United Kingdom’s Bank of England also has a policy setting meeting scheduled for today, and like the Eurozone’s own, policy watchers are anxious to hear if there is a more dovish overtone. GBP/USD held steady at $1.5647, just off the 4½ month trough of $1.5630 which had been established earlier in the week. The BOE’s incoming governor Mark Carney, who will be replacing Mervyn King, is also expected to testify in front of Parliament today which could prove a distraction to some investors.