The euro, Aussie and kiwi strengthened against the dollar on Thursday, as investors await the European Central Bank’s (ECB) policy decision.
Market players remain focused on whether the ECB will extend its asset-purchasing program beyond its end date of March 2017. There is also speculation that the central bank may change the program to ease concerns of scarce supply. With yields at record lows, the pool of bonds it can purchase is shrinking.
The majority of analysts polled by Reuters expect rates to remain the same on Thursday, but they do expect the central bank to extend its asset-purchasing program before the start of the new year.
The euro was trading up 0.2% against the dollar at $1.1265.
The European Central Bank’s decision is due later today, and Mario Draghi, ECB chief, will speak at a press conference shortly after.
The Australian dollar was trading at a three-week high against the greenback, while the kiwi continued hovering near a 16-month high. The Aussie was lifted by positive trade data.
The Australian dollar was up 0.29% to 0.7694 against the dollar, its highest level since August 18. the New Zealand dollar was up 0.19% to 0.7463, near a 16-month high.
The Australian Bureau of Labor Statistics reported earlier in the day that the trade deficit had narrowed from A$3.250 billion in June to A$2.410 billion in July. Analysts were projecting the deficit to shrink to A$2.750 billion.
Elsewhere, the yen climbed up 0.2% against the dollar, trading at 101.585. Sentiment on the yen improved after remarks from a Bank of Japan deputy governor indicated that the central bank may expand its monetary stimulus in September
The comments were in line with BOJ Governor Haruhiko Kuroda’s remarks earlier in the week, in which he acknowledged the costs of the central bank’s aggressive stimulus.