TOKYO: The euro struggled Wednesday despite surprisingly upbeat eurozone economic data that cast doubt on the prospect of more European Central Bank easing measures.
Sitting around a seven-month low against the dollar, the 19-nation currency has been pushed down by expectations that the ECB would unleash fresh stimulus after its meeting on Thursday.
Those bets took a hit on Tuesday after the positive eurozone manufacturing and jobless figures.
But analysts said the data were likely not enough to change policymakers' minds as persistent economic weakness in the bloc keeps alive hopes for more ECB intervention.
"Regardless of the data, the ECB cannot afford to disappoint on Thursday," Marco Valli, chief euro-area economist at UniCredit SpA, told Bloomberg News.
"The stage has been set for (ECB chief Mario) Draghi to take action."
In Tokyo afternoon trading, the euro weakened to $1.0609 and 130.60 yen against $1.0634 and 130.65 yen in US trade.
The dollar rose to 123.10 yen from 122.86 yen Tuesday in New York.
It broadly weakened against other Asian currencies including the Thai baht, Singapore dollar, South Korean won, Indian rupee and Indonesian rupiah.
The greenback has been climbing on expectations that the Federal Reserve will approve a long-awaited interest rate rise at its December meeting.
But on Tuesday a mixed bag of US economic data, including strong online holiday retail sales and weak manufacturing figures, threw into question the state of the world's top economy.
The Institute for Supply Management purchasing managers' index for the manufacturing sector dropped to 48.6 in November, marking the first contraction in three years.
The disappointing result throws the focus on US employment figures on Friday.
Fed officials have said any rate increase depended on the strength of the economic recovery.
Investors are also eyeing a speech in Washington by Fed chair Janet Yellen later in the day for additional hints about the timing of a rate increase.
Comments
Comments are closed for this article.