Euro Slips Before ECB, Volatility at Four-Year Low
The euro and the pound came under pressure ahead of central bank decisions, while hedging costs in the major currencies fell to their lowest in nearly four years.
EUR/USD down a third day, drops 0.2% to 1.1717; the ECB is widely expected to keep the policy rates on hold later on Thursday
GBP/USD down 0.3% to 1.3341; the Bank of England is forecast to deliver a pre-Christmas interest-rate cut later in the day
A gauge of one-month vol in the G-10 space falls to its lowest level sine early 2022; there is interest for vega exposure at the back-end of the curve, yet long gamma remains out of vogue, traders say.
A gauge of the dollar holds an overnight bounce as markets await US CPI data later in the day; the Bloomberg Dollar Spot Index is up 0.1%.
Treasury yields ease across the curve with the 10-year yield down 2bps to 4.13%.
NOK/SEK climbs 0.1% to 0.9128; Norway’s central bank kept borrowing costs unchanged for a second meeting and said it’s in no rush to move lower while Sweden’s central bank kept borrowing costs at a three-year low and repeated a plan for no change until 2027.
NZD/USD slips 0.2% to 0.5763 as a downward revision to second quarter GDP offset a pick-up in the following period.
USD/JPY up 0.2% to 155.95.
Source : Bloomberg.com
