© Reuters. The euro declined after a rally, the dollar is advancing
Investing.com – The euro declined on Wednesday after a rally prompted by the forecast that the European Central Bank will start this year the reduction of its asset purchase program, while the dollar is gaining ground against its rivals.
The EUR/USD gives up 0.16% at 1.2038 at 02:48 AM ET (07:48 AM GMT). The single currency reached a high of four months to 1.2080 Tuesday, close to the highest level since September estimated at 1.2092.
The euro was boosted after data showed that the manufacturing sector of the euro area had grown at a record pace in December, reinforcing expectations that the ECB will start to reduce its asset purchase program later this year.
Expectations of a tightening of monetary policy in other countries, which would reduce the discrepancies between the federal Reserve and other central banks, have weighed on the dollar, bringing it to a more three-month low against a basket of other major currencies.
The dollar index, which measures the greenback’s strength versus a weighted basket based on the trade of six major currencies, was up 0.13% to 91,68.
The market observers are waiting for the minutes of the December meeting of the Fed, where the rate of interest would increase, which is expected to be released on Wednesday. Two policy makers voted against the rate increase because of concerns that inflation would accelerate as hoped.
Investors also turn to the use of Friday in the United States for December.
The dollar is advancing against the yen, with USD/JPY up 0.08% to 112.37, moving away from an over two-week low of 112.04 ; reached Tuesday.
The book is at a high of three weeks against the greenback with the GBP/USD 1.3598.