Traders Shift Focus to ECB Meeting
The euro continued its climb on Wednesday, supported by reports from Bloomberg on Tuesday that the European Central Bank could announce its plans to end quantitative easing as early as next week at the end of its upcoming policy meeting. The common currency was hovering slightly above its 10-month low of $1.1510 set on May 29th. Until now traders had believed that the ECB would not make this announcement in June, assuming that the central bank would wait until Italy’s political turmoil subsided before making new policy statements. The euro has gained 0.5 percent thus far this week.
As of 2:57 p.m. HK/SIN, the euro was trading at $1.1726 against the dollar, a 0.08 percent rise. It was also higher against the yen, having gained 0.30 percent to trade at 128.98, trading above the two-week high of 128.95 hit early in Wednesday’s Asian trading session.
The dollar remained under pressure on Wednesday after solid economic data released last week gave some traders a sell signal for the greenback. Still, the U.S. dollar managed to break the 110-level against the yen on Wednesday, trading at 110.05 in Asia’s mid-afternoon, a 0.26 percent rise.
NAFTA Worries Remain
The Canadian dollar edged up slightly on Wednesday after hitting a 2 ½ month low on Tuesday. The loonie traded higher after U.S. Treasury Secretary Steven Mnuchin reportedly asked President Trump to exempt Canada from his tariff plan. The Canadian dollar was last trading at $1.2932. President Trump is also rumored to be considering the idea of holding independent trade talks with both Canada and Mexico, a possibility that could foreshadow his plan to cancel the North American Free Trade Agreement (NAFTA).
The Mexican peso has been under pressure on concerns about NAFTA. It has slumped over 12 percent since hitting a 7-month high in mid-April. The currency was up slightly on Wednesday after hitting a 20-month low on Tuesday. It was last trading at 20.387.