Euro Weakening against US Dollar Ahead Of ECB Meeting
The euro has moved down to around the 1.425 level against the US dollar in the first hours of trade in Europe.
Technicians see trend-line resistance at 1.4367 with support seen at 1.4183, according to India Forex.
Economists expect the European Central Bank to keep its current base rate unchanged at today's monthly policy meeting. The current base rate is 1.5%. The ECB will announce its rate decision at 1:45 p.m. CET.
Though rates should remain unchanged, traders expect words from ECB President Jean-Claude Trichet on how the central bank will deal with the recent flare up in European debt markets, especially in Italy and Spain.
Some economists and market watchers say the ECB could start buying bonds again. The central bank stopped buying bonds a few months back but could be forced to reenter markets again because of rising rates in Italy and Spain.
A press conference following the meeting of the Governing Council of the ECB will start at 2:30 p.m. CET, an hour ahead of the opening bell in New York. The press conference will be streamed live on the ECB website here.
Investors believing the euro could see a boost if the ECB says it will intervene again in the bond markets, could try Rydex CurrencyShares Euro Trust (NYSE: FXE) or Market Vectors Double Long Euro ETN (NYSE: URR), a leveraged exchange-traded note that is 2x bullish the euro.
Investors wishing to go long the U.S. dollar can buy PowerShares DB USD Index Bullish (NYSE: UUP).
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