Euro steadies versus dollar as investors wait for ECB meeting

Market has probably priced in dovish comments from Draghi: analyst

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Traders see no move at the ECB meeting on Thursday, but expect central bank chief Mario Draghi to hint about additional easing steps.

By Hiroyuki Kachi

The euro remained flat against the dollar in Asia trade Thursday, as many investors avoided making large bets ahead of the European Central Bank’s policy-setting meeting later in the day.

The euro  traded at $1.1338 from $1.1339 late Wednesday in New York. The common currency  was at ¥135.67 from ¥135.99.
Many currency market dealers and analysts in Tokyo expect the ECB will stand pat by keeping intact the central bank’s €60 billion-a-month bond-buying program. But they also expect the central bank chief Mario Draghi to hint about additional easing steps.
Speculation has been growing that the ECB and the Bank of Japan will increase monetary stimulus to support growth, while the Federal Reserve is widely expected to wait longer before raising short-term rates. U.S. and Japan monetary authorities will hold policy meetings next week.
“Investors continue to find it difficult to make moves,” said Yasuaki Amatatsu, senior analyst of global markets research at Bank of Tokyo-Mitsubishi UFJ, adding that the euro “can’t go either upside or downside.”
“Expectation is high for the ECB officials to go into depth about (future monetary) easing,” said Mr. Amatatsu.
“I think the currency market has priced in (dovish) comments by Mr. Draghi after the ECB meeting,” said Daiwa Securities senior FX strategist Yukio Ishizuki, especially after remarks by a member of the ECB Governing Council last week that sent the common currency into a tailspin from its high near $1.15.
“Even if the euro falls below the $1.13 mark, that may be only temporarily,” said Mr. Ishizuki.
ECB member Ewald Nowotny said last week officials should use more policy instruments to raise the region’s competitiveness. But he later expressed resistance toward an imminent expansion of quantitative easing in the single-currency bloc.
In other currency trade, the U.S. dollar  was at ¥119.63, compared with ¥119.93 late Wednesday.
The WSJ Dollar Index , a measure of the dollar against a basket of major currencies, was down 0.07% at 87.42.