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Euro Retreats From 8-Month High Versus Dollar Before ECB Meets

Posted by Marge Maresca on Oct 1, 2013 7:50:00 PM

Euro Retreats From 8-Month High Versus Dollar Before ECB Meets

By Kevin Buckland and Candice Zachariahs

Oct. 2 (Bloomberg) -- The euro retreated from an eight-month high versus the dollar before the European Central Bank meets today for the first time since President Mario Draghi said he’s ready to deploy another long-term refinancing operation to inject funds into the banking system.

The U.S. currency halted losses against major peers before a private report today forecast to show companies in the U.S. added jobs at a faster pace last month. U.S. lawmakers still need to agree on raising the debt limit to avoid a default after Oct. 17, as the government partially shut down for the first time in 17 years yesterday. Italian Prime Minister Enrico Letta faces a confidence vote today in parliament.

“In recent speeches, some ECB board members were concerned about the low level of excess liquidity,” said Joseph Capurso, a Sydney-based currency strategist at Commonwealth Bank of Australia, the nation’s biggest lender. Indications from the ECB of another LTRO “would be seen as putting downward pressure on European market interest rates and would put downward pressure on the euro.”

The 17-nation shared currency was little changed at $1.3520 as of 8:43 a.m. in Tokyo from yesterday, when it touched $1.3588, the highest since Feb. 6. It held at 132.55 yen. The dollar fetched 98.03 yen from 98 in New York.

“We are ready to use any instrument, including another LTRO if needed, to maintain the short term money markets at the level that is warranted by our assessment of inflation in the medium term,” Draghi said in response to questions from lawmakers in the European Parliament in Brussels on Sept. 23.

U.S. companies added 180,000 to their payrolls in September, according to the median estimate of economists surveyed by Bloomberg News before today’s report from the ADP Research Institute. Firms hired 176,000 workers in August.

 

 

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