FX round-up: Main currency pairs little changed ahead of ECB meeting
Markets were little changed as traders digested the news-flow related to the possibility that stricken Italian lender Banca Monte dei Paschi di Siena might be allowed access to limited state aid and ahead of the European Central Bank's policy meeting on Thursday.
The stricken Italian lender had been given until this week by regulators to raise approximately €4bn in fresh capital, with Qatar's investment fund having been as the most likely possibly 'anchor' investor for that round of financing.
However, Italians' 'hard-no' to their Prime Minister's proposal for constitutional reform meant markets were now worried the Qataris or any other investors for that matter might be willing to take the risk of investing in Italy.
Euro/dollar was off 0.54% to 1.0704 against that backdrop. The day before it had jumped sharply, defying expectations for a spill lower on the heels of the referendum result in Italy.
A solid reading on Markit's Eurozone composite purchasing managers' index, which was also published on 5 December, led the survey compiler to wonder out aloud whether it might not imply a
“The signs of steady fourth quarter growth and indications that inflationary pressures are rising will be unlikely to deter the ECB from extending its QE programme at its December meeting. But the extent to which the Eurozone is benefiting from the weaker euro in particular, if sustained, will raise the likelihood of stimulus being tapered earlier than previously anticipated,” Markit's chief business economist Chris Williamson said.
As of 1712 GMT the US dollar spot index was edging higher by 0.36% to 100.51.
Cable was also on the the backfoot, giving back 0.39% after a similarly large gain to the euro the day before, to 1.2676, as traders remained focused on this week's High Court deliberations on the Brexit process and the possibility that it might make a softer version more likely.
Dollar/yen was again higher, rising 0.27% to 114.06 after having hit an intraday low of 113.50.