Euro stays steady in run-up to ECB meeting, bond sales


TOKYO–The euro was steady in Asia on Thursday ahead of a closely watched meeting of the European Central Bank (ECB) and bond auctions by debt-ridden Spain and Italy. The single currency bought US$1.2717 and 97.75 yen in Tokyo afternoon trade, compared with US$1.2707 and 97.70 yen in New York late Wednesday. The dollar was almost flat, trading at 76.86 yen. The euro remains biased to the downside but sharp falls were unlikely in Asia ahead of Thursday’s European Central Bank meeting and Spanish and Italian bond sales later, said a senior dealer at a major Japanese trust bank. Currency rates hardly moved after Japanese Finance Minister Jun Azumi and visiting U.S. Treasury Secretary Timothy Geithner said they shared the view that Europe should strengthen its firewall in the sovereign debt crisis. National Australia Bank said the ECB’s new board was considered “more dovish” than the old. “So, while no easing of interest rates is expected the market likely anticipates a softer stance on the issue of bond purchases,” it said in a note, according to Dow Jones Newswires. “The euro is likely to be supported if there is a more conciliatory tone, but the greater risk is a sell-off if president (Mario) Draghi retains the ECB’s opposition.” In general, the central bank sees its role in the long-running debt crisis as limited, insisting it is up to national governments to find a long-lasting and sustainable solution. Draghi has said that a controversial bond-buying program launched under the previous head, Frenchman Jean-Claude Trichet, is only temporary.