Single currency firmer ahead of crucial day for Draghi and co
The euro held on to gains made earlier this week overnight ahead of a crucial day for the eurozone, with the ECB poised to act to curb soaring borrowing costs for periphery nations.
Later today Mario Draghi and the European Central Bank are expected to expand on an announcement in August when it said it would start buying Spanish and Italian government bonds to ease pressure on those countries’ soaring bond yields.
The deal was conditional on them first seeking help from the eurozone’s rescue fund.
Further details will be revealed today. According to reports, one option is for the central bank to waive seniority status on government bonds it buys under a new program, leaving itself on the hook for losses.
Ahead of the news, the euro had already gained over one cent against the dollar yesterday, climbing to a high of $1.2625, and this morning it was higher still, up to $1.2630.
Shares were more muted however as investors held back ahead of any decision in Europe, with US shares mixed overnight, and Asia making little headway.
In the US the S&P 500 closed flat, down 1 point at 1,403, while the Dow gained 11 points to 13,047.
In Asia the Nikkei 225 remained flat at 8,680, while the Hong Kong Hang Seng was also stagnant, dropping 9 points to 19,135.
This article was first published on Investment Week