Global shares steady, euro firm as Draghi's views awaited

Thu Feb 7, 2013 8:21am EST
 
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By Richard Hubbard

London (Reuters) - The euro and shares were little changed on Thursday after the European Central Bank left rates steady at its monthly policy meeting as investors awaited president Mario Draghi's views on the region's growth outlook.

U.S. stock futures pointed to modest gains when Wall Street opens, though market participants said much depends on whether the ECB president makes any comments on the level of the euro at a news conference due to begin at 1330 GMT. .N

The euro held onto the 0.3 percent gains made before the ECB announcement to trade around $1.3570, above this week's low of $1.3458 plumbed but well shy of a 15-month peak of $1.3711 set last Friday.

The currency of the 17-nation bloc has soared by 20 percent against Japan's yen in just three months, risen 8 percent on sterling and 7 percent on the dollar, heightening tensions among policymakers.

"Draghi has to be very careful because it's a very sensitive time in currency markets, and investors will be looking for any hint of the ECB's thinking on this issue," said Ned Rumpeltin, head of G10 FX strategy at Standard Chartered Bank.

"It is probably the wisest path for him to avoid the debate on the currency at this point in time."

At his news conference last month, Draghi read out a G20 statement on exchange rates in which members pledged to avoid competitive devaluations. With another meeting of the group due next week, it's likely he will stick to this line.

Draghi has also pointed out that the euro's trade-weighted index is still down more than 10 percent from its 2009 peaks so may not yet be a significant drag on growth.   Continued...

 
People look at a stock index board outside a brokerage in Tokyo January 30, 2013. REUTERS/Toru Hanai