US Dollar gains against euro ahead of ECB meeting

Franfurt (Apr 20)  The U.S. dollar rose against the euro on Wednesday on fears that comments from the European Central Bank on Thursday could hurt the European currency, while some riskier commodity currencies remained near multi-month highs on greater relief over China's economy.

The euro eased from a one-week high against the dollar of $1.1386 touched earlier in the session and was last down 0.22 percent at $1.1329 ahead of the ECB's Thursday meeting. The currency dipped even as analysts said the central bank would likely not announce further stimulus.

"I don't think anyone wants to be extremely long going into the ECB meeting," said Win Thin, global head of emerging market currency strategy at Brown Brothers Harriman in New York. "It's highly unlikely they'll do anything policy-wise, but Mario Draghi has been known to move markets with his jawboning."

Last month the European Central Bank unleashed a volley of interest rate cuts, additional monthly bond purchases and more cheap loans to banks.

The Australian and Canadian dollars eased slightly from recent multi-month highs against the greenback, but still hovered not far from those levels on appetite for riskier assets.

Analysts said growing reassurance about China's economic situation, following strong data on the world's second-biggest economy in recent weeks, has boosted sentiment. The Aussie and Canadian dollars, which are both commodity-linked currencies, were near recent highs despite lower oil prices Wednesday.

U.S. fifty dollar bills are run through a counting machine inside a currency exchange store in Mexico City, Mexico.  
Fed rate hike expectations jolting  currencies

The Australian dollar was last down 0.19 percent against the greenback at $0.7820, but not far from a 10-month high of $0.7830 hit earlier on Wednesday. The Canadian dollar was last down 0.6 percent against the U.S. dollar at C$1.2614, not far from a 9-1/2 month high of C$1.2628 touched Tuesday .

"People get tired of being scared," said Sebastien Galy, currency strategist at Deutsche Bank in New York, on the appetite for riskier commodity currencies. "China has essentially stabilized, and the markets are starting to reflect that."

The dollar edged higher against the safe-haven yen, and was last up 0.15 percent at 109.4190 yen. The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.35 percent at 94.31.

The dollar was last up 0.54 percent against the Swiss franc at 0.9672 franc.

Source: CNBC