ECB Headlines Whipsaw Euro; US Data Eyed
Contradictory reports about whether the European Central Bank might reinstate its bond-buying program triggered jerky moves in the euro against the dollar Friday, with the currency holding on to most of Thursday’s gains as traders awaited the release of crucial economic growth data from the U.S.
The euro strengthened some 1.7% against the greenback Thursday, rising to a more-than-two-week high of $1.2330 after ECB Governor Mario Draghi said he would do whatever it takes to preserve the euro and hinted that the central bank would start buying the debt of financially stressed euro-zone countries like Spain.
“Having raised expectations…the question is whether the ECB will deliver. The market will probably give Draghi the benefit of the doubt ahead of the news conference next Thursday,” said Chris Turner, a currency strategist at ING Bank in London, citing next week’s ECB monthly policy briefing.