Forex traders are waiting for the ECB announcement expected during the European session on Thursday. EUR/USD is slightly lower ahead of the decision, which some expect to result in a cut of 25 basis points.
Euro has been steadied a bit by the announcement that Germany would help stabilize its own banks if needed; leaders also said that they would be open to the idea of a bailout fund on the regional level if it would benefit the banking system and keep the eurozone afloat. There are some concerns about inflation in the eurozone, so a large cut isn’t expected, but some think that a smaller cut could help stimulate the eurozone economy while avoiding serious inflation.
At 3:52 GMT, EUR/USD is down slightly to 1.3331 from 1.3349. EUR/GBP is a little higher at 0.8640, up from 0.8634. As expected, due to the peg, EUR/CHF is about the same at 1.2323.
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