Euro holds gains, dollar falls as traders await ECB meeting

The euro held onto gains against the dollar on Thursday as markets awaited the European Central Bank’s meeting to get clues on the policymakers’ views on the single currency’s rise and its effect on inflation.

The pound steadied above a six-week low but could slide deeper due to the escalating possibility that the EU-UK post-Brexit negotiations will fail.

While traders expect the ECB to keep policy steady, many are awaiting the policymakers’ comments on the euro’s two-year high.

The euro stood at $1.1807 in Asian trade, holding onto a 0.3% spike in the last session. The dollar steadied at 0.9120 against the Swiss franc and stood at 106.20 on the yen. 

The pound bought $1.3307 after recovering from a six-week low. It also broke from a six-week low to trade at 90.79 pence per euro.

The euro was boosted by news that the ECB is becoming more confident in the eurozone’s economic outlook. However, traders are disinclined to buy the single currency ahead of the ECB meeting due to reports that officials are becoming concerned about the euro’s 6% appreciation since its June low against the dollar.

The dollar index slid 0.3% to 93.261. The Aussie fell slightly to $0.7275, while the kiwi traded at $0.6680.