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Euro steady but vulnerable to ECB moves

Monday, September 03 11:32:32

The euro held steady today, supported by expectations the European Central Bank will detail plans this week to stem the debt crisis, but vulnerable to the risk of disappointment and flagging growth prospects.

The growth-linked Australian dollar fell to fresh six-week lows against the dollar and the yen as investors sold after signs of economic weakness in China and weak Australian data.

The euro stood at $1.2570, flat from late U.S. trade on Friday and off an eight-week peak of $1.2638 set that day after a speech by Federal Reserve President Ben Bernanke fanned expectations of further stimulus to revive growth. Traders cited option barriers at $1.2650, with resistance at the July 2 high of $1.2681.

Trade was slow with U.S. markets closed for a holiday. The euro was underpinned by expectations the ECB will unveil a bond buying programme, probably at its policy meeting on Thursday, aimed at lowering borrowing costs for peripheral euro zone countries such as Spain and Italy.