Economists are betting that the ECB will leave its key interest rate on hold at 1.25 percent, and all eyes will be on bank president Jean-Claude Trichet for clues on the next hike.
The New Zealand dollar was the stand-out gainer in Asian trade today after Reserve Bank of New Zealand governor Alan Bollard made remarks seen as being more upbeat about the economy, still recovering from the earthquake that hit Christchurch in February.
“The euro has tracked higher on flow ahead of the ECB [decision],” says Gareth Berry, an FX strategist at UBS in Singapore. “On the New Zealand dollar, the market took Bollard’s remarks as being quite hawkish.”
The euro rose to 1.4614 against the dollar, close to a one-month high, while the New Zealand dollar traded at 82.47 US cents, compared with 81.50 cents previously. The Australian dollar fell 0.4 percent to $1.0578, after a weaker-than-expected jobs report.
Three-month euribor futures for September delivery were trading at 1.735%, compared with 1.452% for the current contract, suggesting that investors are pricing in a 25-basis-point ECB interest rate rise by then.