As the European Central Bank’s monthly meeting looms, the common currency Euro steadied but held close to a 2-month trough which had been set against the greenback earlier this week. Analysts expect the EUR/USD pair to be relatively range bound with two key events occurring, namely the ECB meeting outcome and tomorrow’s release of governmental labor data from the U.S. Some FX players are speculating that the ECB might move to ease in order to halt the deflationary trend which has weighed heavily on the Euro, however analysts polled don’t believe that the ECB will make a decision yet, preferring to wait for more concrete evidence of the trend. The press conference which follows the announcement could provide some clues as to Mario Draghi’s future intentions.
As reported at 11:44 a.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.3528, but remained within striking distance of Monday’s trough at $1.3477. The EUR/JPY was relatively flat at 137.27 Yen, holding close to Tuesday’s 11-week trough of 136.25 Yen. Meanwhile the USD/JPY pair traded at 101.47 Yen, also remaining above Tuesday’s low but still down 0.5% for the week.
NFP Data Eyed
On Wednesday, the release of ADP jobs data provided little clue to what the Federal Reserve might be compelled to do regarding additional easing. According to ADP 175,000 new jobs were added in January, the smallest rise in more than five months. Analysts polled are predicting that the U.S. non-farms report will show that a January jobs rebound which follows December’s disappointing data.