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Euro Slips ahead of the ECB Policy Decision

euroDuring the Asian trade session, on Wednesday, the euro was broadly weaker as the common currency hit a two month low against the U.S. dollar. Traders are waiting for the European Central Bank’s stance on monetary policy to be delivered tomorrow.

The ECB is scheduled to meet and announce policy and a rate decision on Thursday and traders are expecting the European Central Bank to join other central banks by lowering rates.

The EUR/USD exchange rate lost 0.05 percent to trade at $1.1145 after hitting, earlier in the session, its lowest price point since May 31 at $1.1143. The euro she half a percent on Tuesday and the euro is down 0.7 percent so far for the week.

The GBP/USD Forex market was down a fraction at $1.2433 as it is on track for its fourth day in a row of losses. It is very close to its two year low at $1.2382.

The USD/JPY Forex market is near a one week high at 108.29 yen. This is thanks to a rise in Treasury yields thanks to progress with trade talks between China and the United States.

The dollar index, is trading higher at a five week high at 97.755. The dollar index was up half a percent on Tuesday.

Traders Wait on the ECB and Sell the Euro Currency

The European common currency has fallen ahead of the ECB monetary policy announcement. This is on the schedule for Thursday during the European trade session. The currency markets are expecting the ECB to cut rates by 10 basis points and hear a dovish forward guidance opening more easing by their September meeting.

Both the EUR and the GBP slumped after Boris Johnson won the Tory leadership race to become the next Prime Minister of the United Kingdom. He seems ready to pull the U.K. out of the European Union with or without a deal on October 31.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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