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Forex - Euro slips ahead of ECB meeting, EU summit

Published 12/08/2011, 06:05 AM
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Investing.com - The euro was weaker against its major counterparts on Thursday, ahead of a European Central Bank policy decision later in the day and the start of a decisive two-day European Union summit.

During European late morning trade, the euro was lower against the U.S. dollar, with EUR/USD sliding 0.21% to hit 1.3382.

The ECB was expected to announce a 0.25% interest rate cut, bringing the rate to a record low 1% in a bid to bolster faltering growth in the euro zone.

Meanwhile, investors remained jittery after Germany dampened expectations for a breakthrough on an agreement to arrest the spread of the debt crisis in the euro zone at a summit of EU leaders set to begin later Thursday.

European leaders were to discuss proposed changes to EU treaties which would allow for greater fiscal integration and stricter enforcement of budgetary discipline in the single currency bloc, clearing the way for the ECB to play a bigger role in stabilizing euro zone bond markets.

The euro was also lower against the pound, with EUR/GBP slipping 0.11% to hit 0.8525.

The Bank of England was widely expected to keep rates unchanged at a record low of 0.5% and not announce any increase to its GBP275 billion asset purchase program at its policy-setting meeting later Thursday.

The single currency was down against the yen and the Swiss franc, with EUR/JPY shedding 0.55% to hit 103.58 and EUR/CHF easing down 0.13% to hit 1.2369.

In Japan, government data showed that core machinery orders fell unexpectedly in October, tumbling 6.9% after an 8.2% decline the previous month.

Analysts had expected core machinery orders to rise 0.2% in October.

Elsewhere, the euro was lower against the Canadian, Australian and New Zealand dollars, with EUR/CAD losing 0.16% to hit 1.3521, EUR/AUD dipping 0.02% to hit 1.3025 and EUR/NZD down 0.23% to hit 1.7157.

Earlier in the day, official data showed that Australia’s unemployment rate rose unexpectedly in November, ticking up to 5.3% from 5.2% the previous month, while the number of people in employment fell by 6,300, defying expectations for a 10,600 gain.

Meanwhile, the Reserve Bank of New Zealand left interest rates unchanged at 2.5% earlier, in a widely expected decision.

Later Thursday, the U.S. was to release official data on initial jobless claims.

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