Dollar lower vs. euro ahead of ECB decision

Shutterstock photo - " The dollar fell to session lows against the euro on Wednesday following media reports that European Central Bank sources said a rate cut on Thursday was unlikely despite a downturn in inflation last month.

During U.S. morning trade, the euro rose to session highs against the dollar, with EUR/USD climbing 0.37% to 1.3525.

The euro strengthened following reports that ECB sources said the bank was unlikely to cut rates at its monthly meeting on Thursday despite data last week showing that euro zone annual inflation fell to a four year low in October.

The euro had moved higher earlier in the session after robust German factory data offset concerns over possible monetary easing by the ECB in order to safeguard the economic recovery in the region.

German factory orders rose 3.3% in September, easily outstripping expectations for a gain of 0.5% and were 7.9% higher on a year-over-year basis.

Meanwhile, revised data showed that the final reading of the euro zone's services purchasing managers' index ticked down to 51.6 in October from 52.2 in September, but was higher than a preliminary estimate of 50.9.

A separate report showed that euro zone retail sales fell more-than-expected in September.

While no policy change was expected from the ECB on Thursday many investors expected the bank to signal the possibility of further rate cuts at its meeting in December.

Elsewhere, the dollar edged higher against the yen, with USD/JPY rising 0.16% to 98.65.

The dollar was lower against the pound, with GBP/USD up 0.22% to 1.6078 after better-than-forecast data on U.K. manufacturing output added to signs that the economic recovery is gaining traction.

Manufacturing production in the U.K. rose 1.2% in September, above expectations for a 1.1% increase and was 0.8% higher on a year-over-year basis, beating forecasts for a 0.7% annual gain, data on Wednesday showed.

The dollar was also lower against the Swiss franc, with USD/CHF losing 0.28% to trade at 0.9109.

The greenback was trading close to two-week lows against the New Zealand dollar, with NZD/USD rising 0.35% to 0.8392, following the release of stronger-than-forecast third quarter New Zealand employment data.

The greenback was down against the Australian and Canadian dollars, with AUD/USD rising 0.17% to 0.9523 and USD/CAD falling 0.35% to 1.0418.

The loonie, as the Canadian dollar is also known, shrugged off data showing that the number of new building permits issued in Canada rose 1.7% in September, below expectations for a gain of 6%.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.34% to 80.52. offers an extensive set of professional tools for the financial markets.
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This article appears in: Investing , Forex and Currencies

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