The euro rose before the ECB announcement; The dollar fell

Before a meeting of the European Central Bank on Thursday, the euro rose. The dollar decreasing against major peers as plans for a massive U.S. stimulus package fuelled market optimism. It also weakened the demand for safe-haven currencies.

Significantly, stock markets touched record highs on Wall Street. Chiefly, in Asia after the inauguration of Joe Biden, America’s 46th president would secure a $1.9 trillion package to support the coronavirus hit economy.

The U.S. dollar index declined by 0.2% and settled at 90.240, dipping for a third day after reaching a nearly one-month high of 90.956 on Monday.

The euro boosted by 0.2%, reversing a similar drop from the previous session. It traded at $1.2134 about four hours before the European Central Bank’s policy decision.

ING strategist announced that they do not anticipate many fireworks from the European Central Bank meeting. Moreover, according to some analysts, American currency will continue its downtrend. The dollar witnessed it lose nearly 7% last year amid ultra-loose U.S. monetary policy and optimism for a post-pandemic global rebound.

Furthermore, Ing Strategist stated that they do not anticipate the bearish dollar dynamics to dominate.

The U.S. dollar also fell by 0.1% and settled at 103.505 yen on January 21. Subsequently dropping to a two-week low of 103.33.

Furthermore, the Bank of Japan held monetary policy unchanged on January 21 while revising up its economic estimate for the next fiscal year.

Norway’s central bank left its key policy interest rate at 0%

Additionally, Norway’s central bank left its key policy interest rate at 0% on January 21. They stated that the economy was developing as expected.

Meanwhile, Norges Bank has announced its plans to raise rates early in 2022 as the economy rebounds from the COVID-19 pandemic, making it the first among G10 central banks to borrowing costs.

The Australian dollar increased by 0.2% and settled at 77.62 U.S. cents. In contrast, in the previous session, it boosted by 0.7%. According to Thursday’s data, Australia boasted another substantial rise in employment in December.

The greenback declined by 0.13% against the Canadian dollar. It settled at C$1.2618 after the Bank of Canada chose not to cut interest rates.

On January 20, the central bank announced that a coronavirus vaccine’s arrival and stronger foreign demand lightened the economic forecast in the medium term. It opted to hold its key overnight interest rate at 0.25%.