Reuters: US Dollar Report: GLOBAL MARKETS-Euro steadies, shares sag ahead of ECB meeting

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GLOBAL MARKETS-Euro steadies, shares sag ahead of ECB meeting May 2nd 2013, 07:45 Tweet Share this Email Print Related Topics Stocks » Currencies » Markets » Cyclical Consumer Goods » Financials » Industrials » Thu May 2, 2013 3:45am EDT * ECB rate decision eyed, markets expect 25 bps cut * Euro off 2-month high, Dollar vulnerable after weak data * Worry about weak China demand hits Shanghai copper * European shares dip By Marc Jones LONDON, May 2 (Reuters) - The euro remained near a two month high and European shares eased on Thursday, as investors waited to see if the European Central Bank will cut rates and hint at more measures to boost struggling eurozone economies. The ECB is expected to react to the recent downturn in even core euro zone countries like Germany by trimming its main interest rate for the first time in 10 months to a new all-time low of 0.5 percent from 0.75 percent in a statement at 1145 GMT. But following Wednesday's message from the U.S. Federal Reserve that it could step up its bond purchase programme if required, focus in Bratislava where the ECB meets this month, will be on what else it can do to ease the pressure on the region's struggling economy. Top European shares on the FTSEurofirst 300 opened down 0.2 percent ahead of the meeting, as London's FTSE 100 fell 0.25 percent, Paris's CAC-40 dropped 0.3 percent but Frankfurt's DAX edged up 0.1 percent. In the currency market, the euro was beginning to inch back up although mild selling earlier in Asia left it down 0.2 percent for the day and off Wednesday's two-month high at $1.3155 "The central scenario is the main rate being cut to 0.5 percent and its other powder being kept dry for if the economy deteriorates further," said Nick Beecroft, a macro fund manager at Saxo Bank. "That is priced in and the euro may continue higher if that is the case especially in a world where the Fed has opened up the possibility of more easing." Weak manufacturing data out of China had already reinforced doubts over the health of the global economy as had weaker-than-expected ADP jobs figures from the U.S. in the previous session. The HSBC China Purchasing Managers' Index dropped to 50.4 in April from March's 51.6 and a tad below a flash reading of 50.5, as new export orders fell for the first time this year. That had weighed Australia's shares and currency while also hitting Chinese shares and oil and copper prices. Back in Europe's bond market, focus remained squarely on what the ECB would do with rates with expectations for a cut underpinning demand for the already ready rock bottom yields offered by German government bonds. Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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