The risk-sensitive Australian and New Zealand dollars fell slightly in the Asia session. Sterling slipped and the euro was marginally weaker at $ 1.1297. The yen dropped a fraction to 114.51 per dollar.
Reuters
February 03, 2022 / 01:15 PM IST
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The dollar found some footing on Thursday, pausing the week’s slide as a slump in tech and social media stocks soured appetite for riskier currencies, and as traders awaited central bank meetings in Britain and Europe.
The risk-sensitive Australian and New Zealand dollars fell slightly in the Asia session. Sterling slipped and the euro was marginally weaker at $ 1.1297. The yen dropped a fraction to 114.51 per dollar.
Shares in Facebook owner Meta plunged more than 20 percent after the bell as earnings and the outlook fell short of expectations.
Shares in Twitter and Spotify also fell and Nasdaq 100 futures dropped 2 percent, dragging on demand for currencies like the Antipodeans, said Westpac analyst Imre Speizer in Christchurch.
The Aussie was last down 0.2 percent at $ 0.7120, shy of resistance at $ 0.7180. The kiwi was 0.1 percent lower at $ 0.6620.
Trade in Asia was lightened by a holiday in China.
Policy decisions from the Bank of England (BoE) and European Central Bank (ECB) are due at 1200 GMT and 1245 GMT respectively, and a news conference with ECB President Christine Lagarde is scheduled at 1330 GMT.
“Hawkish outcomes might pressure the U.S. dollar,” said Speizer. The dollar index has dropped back to its 50-day moving average and was steady on Thursday at 96.043.
Markets have fully priced in a 25 basis point hike from the BoE, so the focus will likely fall on the outlook.
While the ECB is not expected to offer up policy changes, hot consumer prices and recent strong labour data has raised expectations for a shift away from describing inflation as transitory.
“The odds have clearly risen that the bank opens the door to normalising policy and Christine Lagarde potentially tells us that she cannot rule out a hike this year,” said Chris Weston, head of research at brokerage Pepperstone in Melbourne.
“This would move the bank closer to market pricing and justify a long euro position.”
Sterling eased 0.2 percent to $ 1.3547 and softened a bit to 83.36 pence per euro . Euro/sterling volatility gauges touched their highest for the year ahead of the meetings.
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