Euro decline after 3-day consistent rise ahead of the ECB meeting

Euro decline

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The euro was slightly weaker on Thursday ahead of a European Central Bank meeting, which could imply a faster-than-expected monetary tightening to combat increasing inflation. At the same time, the dollar was boosted by a deteriorating risk appetite.

On Thursday, the ECB is almost set to keep policy unchanged. Still, it may be compelled to recognise that inflation may be higher than expected for longer than expected, a warning that some may interpret as a signal of a speedier exit from stimulus.

The euro was slightly down at $1.1296 after climbing about 2% in the previous three sessions in anticipation of an ECB hawkish tilt.

Meanwhile, a drop in tech stocks on Wall Street dampened risk appetite, boosting the greenback, while riskier Australian and New Zealand currencies fell somewhat.

Nasdaq futures tumbled more than 2% after Meta Platforms Inc, which owns Facebook (FB), saw its stock drop more than 20% late Wednesday after a weaker-than-expected forecast.

After declining for three days in a row, the US dollar index, which measures the greenback against six rivals, rose 0.06 percent to 96.088.

Sterling will also be in the limelight, as the Bank of England is expected to boost interest rates again on Thursday, signalling a continuation of the central bank’s massive stimulus programme.

The pound rose 0.1 percent against the euro but fell 0.2 percent against the dollar.

Meta Platforms Inc’s Frankfurt-listed shares fell more than 20% on Thursday, tracking a drop on the Nasdaq after the social network business offered a bleak prognosis, blaming Apple’s (AAPL) privacy reforms and greater competition.

For the first time, the technology giant recorded a drop in daily active users from the previous quarter, as a battle for users with rivals like TikTok, a video sharing site controlled by China’s ByteDance, heats up.

The Frankfurt index was down 20.4 percent at 226.45 euros at 0717 GMT. The S&P/ASX 200 index fell 0.14 percent at the close in Sydney. 

Bitcoin increased by 0.6 percent to $37,120, while ether, the world’s second-largest cryptocurrency, remained unchanged at $2,683.


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