EUR/USD bias down after Draghi hints at more European Central Bank stimulus

Analysts now expect the European Central Bank to extend its quantitative policy at its December meeting.

Add to all of this Thursday’s statements from ECB’s chief Mario Draghi, and markets couldn’t but go up.

Japan’s Nikkei stock index .N225 was up 2.3 percent, poised for a weekly increase of 3.2 percent.

Greece’s bond curve was close to normalizing, having been distorted for months following its political crisis that saw it teeter on the brink of leaving the euro.

A growth slowdown in China and ongoing troubles in Japan’s economy have also exacerbated talk that those countries will soon announce more measures, feeding a rally in financial markets.

The muted gains in China-linked currencies also reflected the US dollar’s strength through the day.

Hong Kong’s Hang Seng Index gained 1.3% and the Shanghai Composite Index added 1.3%, capping a third weekly increase, amid speculation the government will take more measures to bolster the economy before a top-level Communist Party meeting starts next week.

The Sensex rose nearly 1% this week, helped by better-than-expected quarterly results from index heavyweights like Reliance Industries and value buying in information technology stocks.

“But if the Fed can hike and the ECB’s also doing a few easing…then that would be a more bearish scenario for the euro and we could potentially see a break from this $1.05 – $1.15 range we’ve been in for quite a while”.

On Thursday after the announcement by European Central Bank President Mario Draghi, Euro faltered to its three week low on the back of verbal intervention by Mario Draghi.

The Fed will meet on Tuesday and Wednesday, after its policymakers opted to hold interest rates steady last month, amid concerns that a slowing global economy, particularly in China, could pose risks to the U.S. economic outlook.

The kiwi rose as high as 61.63 euro cents, the highest since late June, and traded at 61.53 cents at 5pm in Wellington, from 59.58 cents late yesterday.

The euro fell to as low as $1.1072 at one point in Asian trade, breaking below the $1.11 mark, which has been a major support for the currency in the last several weeks.

But another disappointing U.S. jobs report next month after October’s weaker-than-expected growth “might be cause for further pause”, he said. USA stocks were poised for a more subdued open, with Dow futures up 0.5 percent and the broader S&P 500 futures up 0.4 percent.

In Tokyo trading, Toyota shares gained 1.48 percent to 7,538 yen, while market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, was up 2.22 percent to 44,180 yen.