Major currencies mostly, stuck to tight ranges on Thursday as traders focused their attention on the European Central Bank’s (ECB) policy review later in the day, while the Australian and Canadian dollar struggled near two-month lows.
The yen and the Swiss franc edged up as investors looked for a safe house in the safe-haven resources in the midst of indications of tension between the United States and North Korea and renewed fears of a slowdown in global growth.
The ECB is expected to cut growth forecasts and is probably going to give its strongest signal yet that stimulus is coming in the form of cheaper long-term bank loans to fight an economic slowdown.
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The euro trod water on Thursday at $1.1307, about 1.0 percent beneath a one-month high hit on Thursday a week ago.
“The market has just been valuing in that the economic growth in the eurozone isn’t great,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo.
“Though the fact that I think there is a probability there might be an opportunity to their (ECB’s) forward guidance, that also has been already priced to some extent,” he said.
The OECD on Wednesday cut forecasts again for the global economy in 2019 and 2020, after on from previous downgrades in November, as it warned that trade disputes and uncertainty over Britain’s exit from the European Union would hit world commerce and businesses.
The Australian and Canadian dollar hit their two-month lows as investors cut back property on desires policymakers would leave interest rates alone for the time being or even lower them to counter weakness in those economies.
The Aussie hit a fresh two-month low of $0.70205 after information demonstrated retail deals rose 0.1 percent in January, missing expectations for a 0.3 percent expansion.
The currency was already nursing misfortunes from the earlier day when below-par fourth-quarter economic growth figures reinforced evidence of slowing domestic momentum and backing expectations for a rate cut this year.
The Australian dollar was last at $0.7044.
The Bank of Canada (BoC) on Wednesday said there was “increased uncertainty” about the planning of future rate hikes as it interest rates steady at 1.75 percent as expected.
The loonie fell as low as C$1.3457 after the release of the BoC’s latest policy statement, its least against the greenback since Jan. 4. On Thursday, it was a smidgen more grounded on the day, the last trading at C$1.3436.
The yen and the Swiss franc, both saw as safe-haven currencies, discovered help in the midst of indications of pressure between the United States and North Korea.
New activities have been identified as a North Korean intercontinental ballistic missiles plant, South Korean media said on Thursday, as U.S. President Donald Trump said he would be very disappointed if Pyongyang rebuilt a rocket site.
“It’s news that prompts purchasing of the yen and, in such manner, additionally influences the Swiss franc,” said Kazushige Kaida, head of remote exchange at State Street Bank in Tokyo.
“But there was a move of only 5 bits or 10 bits, so it’s hard to say there was a big response to this,” he said.
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The yen rose one-tenth of a percent to 111.65 yen per dollar, while the Swiss franc was additionally up 0.1 percent, at 1.0043 francs per dollar.
The dollar index, which measures the greenback against a basket of six key rivals, was steady at 96.852.
Traders have stayed bullish on the dollar in view continuing uncertainties over Brexit and whether U.S.-China negotiations will produce a substantive trade deal.
The dollar index has increased 1.1 percent in the course of the last six trading sessions after hitting its lowest level since early February on Thursday last week.
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