EUR lags ahead of key ECB call - The single...>

FOREX: EUR lags ahead of key ECB call

- The single currency lagged throughout US trading hours, prompting EUR/USD to

retreat toward the week's lows ahead of a much anticipated ECB call, at which

the bank are expected to discuss widening collateral rules to accept junk-rated

bonds ahead of the rating review for Italy this week. Appetite for European debt

has been high also this week, with both Spain and Italy successfully selling new

bond lines over the past two days. While no immediate decision is expected, this

may be a key topic of discussion at next week's rate decision.

- AUD extended its outperformance from the Asia-Pac session well through into

the US close. Nonetheless, AUD/USD remains vulnerable after the sharp sell-off

from the mid-April high. The $0.64 handle needs to give way before the outlook

changes. The greenback was mixed against the rest of G10, but the USD index is

still on track to log three consecutive sessions of gains.

- South Korean Q1 GDP and global preliminary PMI data takes focus Thursday.

Weekly US jobless claims and March new home sales are also on the docket. BoE's

Vlieghe is due to speak on policy and the BoE's balance sheet.