Euro steady ahead of ECB; investors adjust Fed view
TLT•The euro was steady at about $1.1137 ahead of an ECB policy decision, while the dollar steadied after traders reduced bets on Fed rate hikes in 2027. The two-year U.S. Treasury yield fell 6 basis points to 4.672%.
1. Euro awaits ECB decision
The euro held around $1.1137 on Thursday ahead of the European Central Bank’s policy decision, with attention on the inflation outlook and turmoil in French bond markets. The euro is down 2% against the dollar this month and 5.1% this year, while investors’ net short position reached $18.89 billion, its largest in a decade.
2. Fed view shifts
The Federal Reserve left rates unchanged and described the economy as growing at a “strong pace.” After Chair Kevin Warsh’s press conference, traders reined in bets on rate hikes in 2027, and the two-year Treasury yield fell 6 basis points to 4.672%.
3. Other currencies steady
The dollar index stood at 102.2, while the yen held steady at 157.86 per dollar ahead of a Bank of Japan decision expected to leave rates unchanged. The New Zealand dollar stabilized at $0.5622 after falling nearly 2% following the Reserve Bank of New Zealand’s decision to keep rates at 2.75%.
