Euro remained steady against the dollar during the European trading session as market participants wait on the sidelines ahead of the European Central Bank policy meeting on Thursday. There is growing speculation that the ECB will cut the key interest rate by at least 25 basis points to 0.75 percent. There is uncertainty how the euro would react in such a case given the current conditions in the euro zone. A rate cut to boost growth may paradoxically be euro-positive though otherwise a rate cut would usually be negative for a currency.
EURUSD traded sideways in a range of 1.2573 and 1.2613. Going into the U.S. trading session, volumes are expected to be light ahead of the U.S. Independence Day holiday on 4th of July.
GBPUSD fell to a low of 1.5672 just before the release of U.K. construction PMI. The June figures came in weaker than forecast at 48.2, which is in the contraction phase, highlighting continued weakness in the U.K. economy. Going into the New York trading session, cable extended its decline to 1.5660. Sterling remains vulnerable ahead of the Bank of England policy meeting on Thursday when further quantitative easing is expected.
USDJPY was propped up in the Europe session, trading near the top of a tight range of 79.74 – 79.84. The pair last traded downwards to 79.70 as the U.S. session overlap began. EURJPY was supported above the key 110.00 level for most of the Europe trade, coming under pressure in the New York trade towards 100.21 from an early high of 100.70.