Investors may sell the euro regardless of whether the European Central Bank steps up measures to stem the region’s debt crisis at a meeting of policy makers today, according to Societe Generale SA.
“Failure to do something will see the crisis return in force after yesterday’s mini-hiatus,”Kit Juckes, London-based head of foreign-exchange research, said in an e-mailed note received today. It’s also “hard to see” how buying bonds under a so-called quantitative-easing program “is really good for the euro so it feels like a sell either way,” he wrote.
The announcement of an unsterilized bond-buying plan “would surely lead to a big sell-off in bunds,” Societe Generale analystsVincent Chaigneau,Aro Razafindrakola andHugues Naka wrote in a separate report yesterday. “This, however, is unlikely to happen,” they said.
The euro appreciated 0.1 percent to $1.3154 at 12:01 p.m. in London. The yield on the 10-year German bund climbed two basis points to 2.81 percent.
The ECB will leave its main interest rate at 1 percent today, according to all 52 analysts surveyed by Bloomberg.
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