Dollar Eases Against Euro Ahead of Central-Bank Decisions
December 07 2016 - 11:06AM
Dow Jones News
By Chelsey Dulaney
The dollar fell against the euro on Wednesday, as investors
focused on coming central-bank decisions.
The euro rose 0.3% to $1.0745. The WSJ Dollar Index, which
measures the U.S. currency against 16 others, fell 0.1% to
91.02.
The European Central Bank will announce its latest policy
decision on Thursday. Analysts at Credit Suisse say the central
bank could deliver some fresh easing at the meeting but signal it
is considering tapering easing operations in coming months.
"This type of mixed signal is not easy to decipher," analysts at
Credit Suisse wrote in a research note. "A poorly-explained move
towards tapering would pose a risk of a European 'taper tantrum'
and a potent euro surge on the day."
Meanwhile, the Fed holds a policy meeting next week. Markets are
pricing in a 95% chance that the Fed will raise interest rates at
the meeting, according to CME Group data. Signs the central bank is
taking a more hawkish view on future rate increases could boost the
dollar and pressure emerging-market currencies, such as the Chinese
yuan.
Data released on Wednesday showed China's foreign-exchange
reserves fell faster-than-expected in November, as the Chinese
central bank stepped up efforts to defend the sliding yuan. The
dollar was recently up 0.2% against the yuan in offshore
trading.
Higher U.S. interest rates pressure emerging-market nations by
making their assets less attractive to yield-seeking investors and
by making their debt more expensive to pay back.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
December 07, 2016 10:51 ET (15:51 GMT)
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