Euro pares Monday's gain ahead of ECB's meeting on Thursday: Dec 7, 2016

Market Review - 06/12/2016  22:34GMT  

Euro pares Monday's gain ahead of ECB's meeting on Thursday

The single currency retreated on Tuesday after Monday's rally as investors were cautious ahead of this week's ECB meeting and on the course Italy would take following its referendum result.

Euro traded sideways in Asia and briefly edged lower to 1.0737 at European open before rising to session high at 1.0785 in early European morning. However, the single currency pared its gains and dropped to 1.0723 in New York morning on caution ahead of this week's ECB meeting, price later hit session lows of1.0699 before recovering. 

Versus the Japanese yen, although the greenback dropped to 113.51 in Asian morning, price pared its losses and rose to an intra-day high at 114.19 in European morning. Later, dollar retreated once again to 113.67 ahead of New York open before staging a recovery in New York morning. 

The British pound traded with a firm bias in Asia and rose to a fresh 2-month peak at 1.2775 in European morning on cross-buying of sterling especially vs euro. However, cable pared its gains and retreated to 1.2707 in New York morning. Later, price extended intra-day decline to as low as 1.5657 in New York afternoon. 

In other news, spokesman for British PM May said 'gov't clear does not want to extend Brexit negotiation beyond 2-year timetable; Britain going into Brexit negotiations in spirit of goodwill, seeing that reflected in dialogue with EU partners so far; Britain clear it wants a new deal with EU; Britain wants to see smooth, orderly transition out of the EU n confident can achieve that.'

On the data front, in a report, Eurostat said that GDP rose to a seasonally adjusted 0.3%, from 0.3% in the preceding quarter. Analysts had expected GDP to rise 0.3% in the last quarter.

Data to be released on Wednesday: 

Australia GDP, Japan leading indicator, Germany industrial output, UK Halifax house price, industrial output, manufacturing output and Canada BoC rate decision.