EUR rises slightly ahead of ECB decision, dollar weakens on interest rate cut speculation

(MENAFN) During early Thursday trading, the euro experienced a modest increase in value as traders awaited a policy decision from the European Central Bank (ECB). Market sentiment leaned towards the likelihood of a reduction in interest rates, prompting slight gains for the euro. Concurrently, the dollar faced a decline, driven by renewed expectations of interest rate cuts by the Federal Reserve later in the year.

Meanwhile, the Canadian dollar saw a slight rise, recovering some ground lost in the previous session. This uptick followed the Bank of Canada's decision to become the first among the Group of Seven nations to lower its key interest rate, a move widely anticipated by analysts. In recent transactions, the Canadian dollar stood at 1.3687 per dollar.

With anticipation building for the ECB meeting later in the day, the euro edged up by 0.07 percent to USD1.0876. Traders looked to the ECB for signals regarding the future trajectory of interest rates. While policymakers signaled their intent to decrease borrowing costs in the current month, they exercised caution regarding the pace of subsequent rate cuts.

Overall, the dollar's decline in the broader market was attributed in part to the weakness observed in the United States labor market. This trend bolstered expectations for interest rate cuts later in the year, providing further momentum to the dollar's weakening trend. 

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