Euro hovers at 7-mth low in quiet session, US Thanksgiving holiday

The economic calendar is relatively light this Thursday, and with the Thanksgiving holiday in the United States, currency markets are expected to be quiet.

During the Asian session most major currency pairs consolidated in small ranges. The euro hovers close to a seven month low against the dollar as most investors speculate that the European Central Bank will expand stimulus measures at its policy meeting next week.

EUR/USD opened in Asia at 1.0625 and had a quiet session trading a 1.0616-27 range.

The monetary policy divergence between the ECB and the Federal Reserve is growing and this is pressuring the euro versus the dollar. Markets expect the ECB will cut the deposit rate further next week. Meanwhile futures indicate a 72 percent chance the Fed will boost its benchmark interest rate at its December meeting.

Australia’s dollar dropped for a second day after the Australian Bureau of Statistics said business investment slumped 9.2 percent in the third quarter, the largest decline in records going back to 1989. AUD/USD opened in Asia at 0.7256, but slid later from 0.7262 to 0.7216 on the Q3 CAPEX miss but downside limited.

It’s important to note that the pound strengthened for the first time in three days versus the euro on Wednesday after British Chancellor of the Exchequer George Osborne increased the government’s forecast for growth next year. Sterling held onto gains in trading early on Thursday. EUR/GBP was steady in Asia between 0.7020-26.

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