Dollar Edged Lower Early on Euro Market in BOJ Updates

LONDON, U.K. – During the early trading session in the Euro stock market, the US dollar inched moderately lower following the Bank of Japan (BOJ) suggesting that there will be no impending change towards its monetary policy ahead of a busy day of meetings of the central bank.

By around 8:05 GMT, the dollar, which is used to track the greenback over a basket of currencies of the developed markets, was trading 0.1% lower at 96.88.

On the other hand, the BOJ has held over its previous interest rate target for the short term, which is at -0.10%, and 0% for the 10-year government bond yields.

Following these recent updates, the focus of the market will now shift to Scandinavia, where two out of all the central banks all over the world are having their regular meetings with plans to consider tightening their monetary policy.

The Riksbank in Sweden, for one, is expected to end its dip with negative rates, going from the previous -25% towards a key rate of 0%, citing concerns on financial stability.

The krona (EUR/SEK) has edged higher by around 2% against the euro from the previous month in outlook, but traded flat by around 8:05 GMT at 10.4658.

The central bank in Norway, on the other hand, is expected to hold firmly on its current key rate.

After a volatile trading following the general elections in the UK, the British pound has also stayed focus early on Thursday. The currency strengthened ahead of the meeting of the Bank of England to discuss a monetary policy later in the trade, which is predicted to have a 7-2 vote in favor of keeping the current interest rates as is. However, some market players have raised bets that the central bank will vote towards a rate cut following the Prime Minister’s revival of the Brexit scenario and the weakening economic data.

Early on the trading session, the British pound was trading optimistic, which is expected to recover its previous momentum as it increases around 0.3% against the US dollar, settling at $1.3117. The pound has also inched higher against the euro by 0.2% towards 1.1727.

On the other hand, the EUR/GBP pair fell early on Thursday towards its current 0.8484 value.

Elsewhere in the market, the US dollar weakened early on trading in the Euro market. The decline for the currency followed the vote of the House of Representatives to impeach the current US President Donald Trump, who is expected to face trial in the Senate soon. On the other hand, the Aussie was the top gainer early today as it inched higher in response to the country’s November employment data showing stronger numbers than predicted.