Dollar Trades Near 2-Week Low Versus Euro Before U.S. GDP
The dollar traded 0.4 percent from a two-week low against the euro before data today forecast to show the U.S. economy expanded at the slowest pace in a year.
The greenback headed for a weekly loss versus most of its major peers as gains in global shares yesterday sapped demand for the currency as a refuge and amid speculation the Federal Reserve will engage in a third round of quantitative easing, or QE3. The euro maintained a two-day advance against the dollar and yen after European Central Bank President Mario Draghi said policy makers will do whatever is needed to preserve the 17- nation currency.
“The combined possibility that the Fed begins to pave the way for QE3 and that we see, for instance, a reopening of the Securities Markets Program from the ECB would argue for a softer dollar and risk-on at least in the short-term,” said Robert Rennie, chief currency strategist at Westpac Banking Corp. (WBC) in Sydney, referring to the respective asset-purchase programs of the U.S. and euro-area central banks.