Markets

Euro rises ahead of ECB policy meeting

TOKYO : The euro rose against other major currencies in Asia on Thursday ahead of a policy meeting by the European Centr

Published June 9, 2011 Updated June 9, 2011 06:10am

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By Syed Murtaza Gheblehzadeh

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The euro rose to $1.4626 in Tokyo morning trade from $1.4575 in New York late Wednesday and to 117.04 yen from 116.50.

The dollar firmed to 80.01 yen from 79.87 yen.

"Tonight's ECB and Bank of England interest rate decisions will occupy markets' focus," National Australia Bank said in a note to clients.

"Investors will be looking for signals from ECB head (Jean-Claude) Trichet about the possibility of a July rate hike... Rate disappointment from Trichet would be consistent with a (euro-dollar) pullback towards 1.4500," it said.

Most analysts expect the policymakers will leave the key lending rate unchanged at 1.25 percent.

The euro was also higher against the yen following Japan's revision in its first-quarter GDP reading, which kept expectations that the Bank of Japan will keep its loose monetary policy for the time being intact.

"With market participants eyeing the ECB later in the day, investors are sensitive to expectations about monetary policy in major economies," Junichi Ishikawa, FX analyst at IG Markets Securities, told Dow Jones Newswires.

Official data showed Thursday Japan's economy contracted by slightly less than first estimated in the January-March period, doing little to change the gloomy economic picture right after the March 11 earthquake-tsunami disasters.

Japan revised upward its first-quarter GDP reading to an annualised 3.5 percent contraction from a 3.7 percent shrinkage.

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