The European currency was marginally higher on early Tuesday as the dollar caught momentum after a rally. Investors are currently anticipating the release of the plans of ECB on unwinding its massive bond-buying stimulus program.
The European Central Bank (ECB) is sure on scaling back its monetary stimulus on the day. This is widely believed by analysts as their biggest step in the history of cutting back its loose bond-buying program. Still, even if inflation is at its lowest, all of the reductions in the asset purchases monthly is forecasted to come along with a long extension.
However, according to OANDA’s head of trading in Asia-Pacific Stephen Innes, there are some dangers we have to consider in terms of the risk’s that the policy announcement of the central bank could somehow support the euro. He added that the currency market may be up for a non-dovish surprise.
The euro was slightly higher by 0.1 percent at $1.1819. The common currency briefly escaped from a two-week low of $1.1725 on Monday’s closing session.
Looking on other currencies, the dollar recovered from a decline on Wednesday due to expectations for a tax reform progress and the news regarding the next U.S. Federal reserve chief might be the Stanford University economist John Taylor. The president was more than impressed in his interview yesterday.
The index which tracks the U.S. dollar’s value against its major opposing currencies, the U.S. dollar index, stood tall at 93.609. The index fell from its intraday high of 94.008 last Wednesday.