The Euro currency rallied against the majority of its peers after central bank officials indicated that the ECB will announce a new plan to purchase sterilized bonds in order to help stem the debt crisis. The shared currency rose to a two-month high versus the U.S. Dollar over the last few days, as the ECB’s President, Mario Draghi signaled that the bank may announce the implementation of further monetary easing when officials meet today. However, just yesterday, the German Chancellor, Angela Merkel, issued a statement voicing her opposition to unlimited bond purchasing.
The British Pound reached a three-month high against the U.S. Dollar following economic reports revealing that the services sector expanded the most in five months, thereby increasing the possibility the Bank of England will refrain from augmenting its asset-buying program. The Sterling remained strong as releases suggested that the country’s recession may be easing. The Pound extended gains versus the greenback on speculation the ECB will announce a new program to buy bonds.
In other live Forex news, the Bank of Canada left the interest rate unchanged; however, the bank’s Governor, Mark Carney, suggested that borrowing costs will have to go up in order to stop inflation from advancing. The Canadian Dollar fell against 15 of its most traded Forex exchange counterparts. It weakened early in the day on speculation that the new European Central Bank plan won’t be enough to restore confidence in the Euro-zone.
Lastly, Australia’s currency touched the lowest level in seven weeks as growth slowed more than anticipated.