The euro wallowed
near its weakest level in over 11 years against the dollar on Thursday,
as investors waited for the European Central Bank to announce more
details of its massive bond-buying program.
The common currency eased 0.1 percent to $1.1065 EUR=, holding just above Wednesday's low near $1.1061, which was its lowest level since September 2003.
The ECB, which starts its quantitative easing (QE), or bond-buying, program worth more than 1 trillion euros this month, is expected to detail the plan later in the day following its policy meeting.
The QE scheme's details might not trigger much reaction in the euro, since the launch of the program has already been priced in, said Jesper Bargmann, head of trading for Nordea Bank in Singapore.
Still, the divergence in the outlook for monetary policies in the United States and the euro zone is likely to keep the euro under pressure versus the dollar, he said.
"I think the dollar may keep strengthening as we wait for the first rate hike in the U.S.... The trend is in place," Bargmann said.
Markets will be looking for how the ECB's quantitative easing will work, when the buying will start, whether it applies to paper with negative yields and how the purchases will be distributed along the yield curve.
"I
don't think we will see any big surprises... We think that we could see
the beginning of these asset purchases as early as next week," said
Mitul Kotecha, head of FX strategy, Asia-Pacific for Barclays in
Singapore.
Investors have already driven yields across Europe to record lows in anticipation of the ECB's largesse, greatly widening the yield advantage of the U.S. dollar in the process.
While there is much uncertainty over when the U.S. Federal Reserve will start raising interest rates, some analysts expect it to drop the word "patient" in its forward guidance at its policy meeting on March 17-18, paving the way for a possible policy tightening in June.
With the euro looking wobbly, the dollar touched a fresh 11-year high against a basket of major currencies. The dollar index rose to as high as 96.061 .DXY as of 2322 ET, its strongest level since September 2003.
Against the yen, the dollar inched up 0.1 percent to 119.84 yen JPY=, staying within its range so far this week of 119.38 yen to 120.27 yen.
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| New 20 Euro banknotes are presented at the Austrian national bank in Vienna February 24, 2015. |
The common currency eased 0.1 percent to $1.1065 EUR=, holding just above Wednesday's low near $1.1061, which was its lowest level since September 2003.
The ECB, which starts its quantitative easing (QE), or bond-buying, program worth more than 1 trillion euros this month, is expected to detail the plan later in the day following its policy meeting.
The QE scheme's details might not trigger much reaction in the euro, since the launch of the program has already been priced in, said Jesper Bargmann, head of trading for Nordea Bank in Singapore.
Still, the divergence in the outlook for monetary policies in the United States and the euro zone is likely to keep the euro under pressure versus the dollar, he said.
"I think the dollar may keep strengthening as we wait for the first rate hike in the U.S.... The trend is in place," Bargmann said.
Markets will be looking for how the ECB's quantitative easing will work, when the buying will start, whether it applies to paper with negative yields and how the purchases will be distributed along the yield curve.
Investors have already driven yields across Europe to record lows in anticipation of the ECB's largesse, greatly widening the yield advantage of the U.S. dollar in the process.
While there is much uncertainty over when the U.S. Federal Reserve will start raising interest rates, some analysts expect it to drop the word "patient" in its forward guidance at its policy meeting on March 17-18, paving the way for a possible policy tightening in June.
With the euro looking wobbly, the dollar touched a fresh 11-year high against a basket of major currencies. The dollar index rose to as high as 96.061 .DXY as of 2322 ET, its strongest level since September 2003.
Against the yen, the dollar inched up 0.1 percent to 119.84 yen JPY=, staying within its range so far this week of 119.38 yen to 120.27 yen.
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