Euro edges higher on PMI data; markets await Draghi speech: Reuters

LONDON (Reuters) – The euro edged higher on Wednesday, recovering from the day’s lows, though gains on strong private sector growth data from Germany remained muted as investors braced for speeches from European Central Bank President Mario Draghi this week.

With markets broadly trading in established ranges, investors were wary of taking fresh bets, with the only notable move lower among major currency pairs being a further decline in the British pound GBP=D3.

“I don’t expect Mario Draghi to say anything substantial on policy direction with just a few weeks before the ECB policy meeting, and the event may be a non-starter,” said Antje Praefcke, an FX strategist at Commerzbank in Frankfurt.

Investors are awaiting speeches from Fed Chair Janet Yellen and Draghi at Jackson Hole on Friday, though neither is expected to announce new policy messages.

In a speech in Germany on Wednesday, Draghi steered clear of market-sensitive comments.

The euro EUR=EBS was trading 0.1 percent higher at $1.1768 in early trade after weakening half a percent against the dollar on Tuesday.

PMI data from Germany and France propped up the single currency, with both countries registering strong private sector growth in August, separate surveys showed. That served to lift confidence that the euro zone’s biggest economies are likely to maintain their robust momentum in the September quarter.

Meanwhile, the dollar slipped against the yen after U.S. President Donald Trump raised the spectre of a government shutdown to fulfil a campaign pledge.

At a rally with his supporters in Phoenix, Trump referred to his vow to build a wall on the U.S.-Mexican border. “If we have to close down the government, we are building that wall,” he said.

(For a graphic on world FX rates in 2017, click tmsnrt.rs/2egbfVh)

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