Euro strengthens against USD ahead of ECB rate decision

The euro rose almost 0.5% against the US dollar on Thursday afternoon, as markets expect the European Central Bank (ECB) to raise the discount rate, Report informs.

The euro exchange rate was $1.1134 per euro; the previous closing level was $1.1083.

The dollar against the yen at the same time fell to 140.09 yen from 140.21 yen. And the dollar index (the exchange rate against a basket of currencies of six US trading partners) fell by 0.3% to 100.58 points.

Later in the course of trading, the ECB will announce the results of the next meeting. Analysts believe that the regulator will raise the discount rate by 0.25 percentage points - up to 4.25%. The tightening of monetary policy is positive for the respective currency.

As for the dollar exchange rate, investors have already won back that the day before the US Federal Reserve (Fed) raised its refinancing rate also by 0.25 percentage points, to 5.25-5.5% per annum.

At the same time, investors expect the release of macroeconomic statistics in the US, which may also hurt the dollar. Thus, a preliminary estimate of GDP dynamics for the last quarter will be published. According to experts, the country's economic growth slowed down to 1.8% in annual terms (if GDP grew at the same rate for four consecutive quarters) from 2% in the first quarter.

At the same time, the US Department of Labor will publish data on the number of initial claims for unemployment benefits in the country for the week to July 22. Analysts predict an increase in the indicator by 7,000, up to 235,000 applications.