Euro Rises As Traders' Await ECB Rate Decision

(RTTNews) - The euro strengthened against other major currencies in the Asian session on Tuesday, as traders await the European Central Bank's latest policy decision due this week.

The European Central Bank (ECB) is scheduled to announce its interest rate decision on Thursday.

The ECB is expected to hike all three policy rates by 25 basis points, citing a weaker growth outlook and no clear evidence of a peak in core inflation. Few economists, however, predict it will be a close call.

The ECB raised its key interest rates by 25 bps to 4.25 percent during its July meeting.

Traders also looked ahead to the release of key U.S. inflation and other macroeconomic indicators this week ahead of the Federal Reserve's interest-rate decision due September 20.

The Federal Reserve is likely to pause its recent series of rate hikes next week but the outlook for November remains a little more uncertain, with the FedWatch Tool currently indicating a 42.6 percent chance of another quarter point rate hike. In the Asian trading today, the euro rose to a 5-day high of 0.8599 against the pound and nearly a 2-week high of 0.9589 against the Swiss franc, from recent lows of 0.8580 and 0.9571, respectively. If the euro extends its uptrend, it is likely to find resistance around 0.87 against the pound and 0.97 against the franc.

Against the U.S. and the Canadian dollars, the euro advanced to a 1-week high of 1.0768 and a 4-day high of 1.4621 from Monday's closing quotes of 1.0748 and 1.4587, respectively. The euro may test resistance around 1.10 against the greenback and 1.48 against the loonie.

The euro edged up to 157.78 against the yen, from yesterday's closing value of 157.53. On the upside, 160.00 is seen as the next resistance level for the euro.

Looking ahead, Germany's ZEW economic confidence survey results for September is due to be released at 5:00 am ET. The economic sentiment index is forecast to fall to -15.0 from -12.3 in August.

In the New York session, U.S. NFIB Business Optimism Index for August and U.S. Federal Budget Balance for August are slated for release.