Euro edges lower ahead of ECB meeting

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LONDON - The euro dipped against the dollar and European shares edged up on Wednesday with investors trading cautiously ahead of a European Central Bank meeting and a US jobs report.

Markets have been expecting ECB President Mario Draghi to unveil a bold plan to tackle to the euro zone's debt crisis at Thursday's meeting, but public disputes among policymakers over the extent of the measures have begun to sow doubts.

Friday's jobs report will provide a reading on the health of the world's largest economy after other data pointed to a global slowdown in manufacturing.

“We might not get all the details about the ECB bond buying plan tomorrow, but we know it's coming, so it's priced in. Now the question is: how bad is the situation in the US economy? We'll get a better idea on Friday with the payrolls,” David Thebault, head of quantitative sales trading, at Global Equities.

The single currency was down 0.25 percent at $1.2530, off its Tuesday's high of $1.2629 but not far from Friday's high of $1.26378.

The caution gripping investors ahead of the ECB meeting saw share markets across Europe open lower with the FTSE Eurofirst index of top European shares down 0.1 percent at 1080.30 points.

Germany will sell 5 billion euros of new 10-year bonds with a record low coupon of 1.5 percent later in the session and the sale will give an indication of how concerned investors are about the outlook. German Bund futures were 10 ticks higher at 143.60 ahead of the sale.

Signs of slower factory activity across the United States, Asia and Europe during August have heightened fears about health of the global economy, although this has raised hopes of central bank action to ease monetary policy.

Those hopes kept oil prices near $114 a barrel and gold near a six month high at $1,691.64 an ounce. - Reuters


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