The European currency edged higher vs. the U.S dollar as investors awaited European Central Bank President Jean-Claude Trichet's monthly news conference for more details on the central bank's bond-buying program. The European Central Bank (ECB announced today that its key rate remains at a record low 1%. The main event will be Trichet's news conference in Frankfurt at 12:30 a.m. GMT.
The 16-nation currency climbed for the 3rd consecutive day versus the greenback, its longest run of gains in almost 3 weeks. The single currency advanced against the dollar and the yen after economic reports in Asia showed growth is accelerating and a Spanish notes auction drew higher demand than was previously expected. The EUR also extended gains after the head of China's pension fund was quoted saying that the shared currency will survive Europe's debt crisis.
However, gains in the single currency may be limited with the European Central Bank leaving rates unchanged today. Market players will be looking for any indications as to what the ECB officials' intentions are with their bond-buying sterilization and liquidity management. The likelihood of continued policy mishaps remains very high in the near term and as a result the EUR will likely remain under pressure, analysts said.