Forexpros – The dollar gained in early Asian trading on Thursday as investors rushed to the greenback as a currency safe haven ahead of a summit of European Finance Ministers scheduled to wrap up on December 9 and ahead of key Central Bank moves in Europe.
The European Central Bank is expected to cut interest rates by 25 basis points later Thursday, which firmed the greenback against the euro.
During early Asian trading, the greenback was up against the euro, with EUR/USD dipping 0.04% to hit 1.3407 early in the session.
Turning to politics, markets had been optimistic that European leaders will take tough steps to end the debt crisis there, including measures to better coordinate government spending under a more centralized authority.
However, talk that Germany had grown a little skeptical over achieving that goal at the upcoming Brussels summit spooked markets a bit and weakened the euro slightly as investors ran to the sidelines to await the more concreate outcomes.
Those rumblings came in wake of a Standard and Poor’s warning that it would downgrade ratings on 15 European countries should they fail to quickly address the problem.
The greenback was also up against the pound, with GBP/USD falling 0.04% to hit 1.5704, reversing an earlier weakening trend against the U.K. currency.
Demand for the pound rose when talk of German skepticism over the upcoming summit broke, although somewhat weak economic data reversed that trend.
The U.K. Office for National Statistics said manufacturing production fell 0.7% in October, deeper than expectations for a more modest 0.1% decline.
Overall industrial output in the U.K. also fell 0.7% in October, worse than expectations of a 0.3% contraction.
Economists have expressed concern over Britain’s exposure to the eurozone, a naturally heavy trading partner.
Meanwhile, the greenback was down against the yen, with USD/JPY was trading at 77.64, down 0.05%, while up against the franc, with USD/CHF trading up 0.08% at 0.9244.
Japan’s Leading Indicators Index, a composite index based on 12 economic indicators, came in at 91.5 in October, slightly below expectations of around 91.8 but within market comfort zones.
Bank lending in Japan was up 0.2% in November, above expectations for a flat reading.
The greenback was up against its Canadian, Australian and New Zealand counterparts, with USD/CAD climbing 0.01% to hit 1.0099, AUD/USD falling 0.45% to hit 1.0248 and NZD/USD sliding 0.01% to hit 0.7797.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.07% at 78.53.
Later Thursday, the U.K. and Europe will announce their latest monetary policy moves, with the Bank of England seen keeping its benchmark interest rate at 0.50% while the European Central Bank is expected to cut rates by 25 basis points to 1.00%
The U.S. government will release initial jobless claims, which measure the number of individuals filing for unemployment insurance for the first time during the past week.
Market expectations are calling for 396,000, down from a previous figure of 402,000.
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