The euro’s move down yesterday came before the European Central Bank reviews its interest rates policy today, with expectations receding of a move to ease rates to address low inflation.
Europe’s main stock indices inched higher yesterday, a day before a key ECB monetary policy meeting, helped by data showing a pickup in US job creation.
London’s FTSE 100 rose 0.10% to close at 6,659.04 points, in Paris the CAC 40 added 0.09% to 4,430.86, and the DAX 30 in Frankfurt gained 0.20% to 9,623.36.
Madrid slid 0.26% and Milan slumped 1.02% after posting strong gains on Tuesday.
“European markets were directionless today (Wednesday) in anticipation of the European Central Bank rate announcement and press conference tomorrow,” said markets analyst Jasper Lawler at CMC Markets UK.
European markets have been gaining recently, with the CAC 40 on Tuesday hitting levels last seen before the start of the global financial crisis after a survey showed its manufacturing sector edged into growth after a long decline.
US stocks have risen for three straight days, in part due to improving economic data and reassurance from the Federal Reserve that a shift in its extraordinary support for the economy is not imminent.
At ETX Capital, market strategist Ishaq Siddiqi pointed out that “global stock indices are at post-crisis highs—trading at their best readings since December 2007” as improving sentiment across global markets prompted investors to snap up riskier assets.
Wall Street also pushed higher yesterday on supportive US jobs data.
The Dow Jones Industrial Average rose 0.09% to stand at 16,547.42 points in midday trading.
The broad-based S&P 500 gained 0.22% to 1,889.69 points, pushing even further into record territory, while the tech-rich Nasdaq Composite Index added 0.14% to 4,273.88.
Payrolls firm ADP said US businesses added 191,000 jobs in March, below the 215,000 projected by analysts but an improvement on the 178,000 figure for February.
The markets will now look ahead to a US payrolls report tomorrow for indications the economy is picking up pace after severe winter weather.
The vast earthquake in Chile sent copper prices jumping yesterday to a three-week peak, as traders worried about possible supply problems in the top global producer.
The price of the red metal climbed to a three-week high of $6,734 a tonne.
Shares in copper miner Antofagasta rose 2.0% to 856.50 pence in London trade.
In foreign exchange trading, the euro dipped to $1.3759 from $1.3793 late on Tuesday in New York.
The dollar stood at £103.78 after reaching a 2.5-month high of £103.94 in Asian trading hours, which compared with £103.66 Tuesday.
The European single currency fell to 82.73 British pence from 82.93 pence, while the pound rose to $1.6631 from $1.6628.
On the London Bullion Market, the price of gold rose to $1,292 an ounce from $1,283.75 on Monday.
The euro’s move down came before the European Central Bank reviews its interest rates policy today, with expectations receding of a move to ease rates to address low inflation.
Most analysts see a drop in inflation in March to 0.5% as due to temporary factors and that growth is slowly picking up, meaning that the ECB will likely hold off taking any action this month.
But with growth in the 28-nation bloc at just 0.2% in the last quarter of 2013, and producer prices having dipped 0.2% on the month, some traders say that could change in the long-term.
“How close to zero do these numbers have to get before the ECB decides to intervene to stimulate the economy?” asked CMC Markets UK’s Lawler.