TOKYO: The euro lost ground in Asian trading Thursday on growing expectations that the European Central Bank will announce a boost to its monetary stimulus measures at a meeting next week.
Bets that the ECB will go further to boost the 19-nation eurozone economy have pushed down the currency, and rekindled speculation that it may hit parity with the dollar for the first time since 2002.
Reports have suggested that the ECB may boost its debt purchases or surprise the market with unconventional measures after its meeting.
"We expect the ECB will cut the deposit rate by more than the market expects next week," Mansoor Mohi-uddin, senior markets strategist at Royal Bank of Scotland Group in Singapore, told Bloomberg News.
"This should keep the euro a sell on rallies into the meeting and allow the euro to test $1.05 if the ECB meets our expectations."
The euro declined to $1.0619 in Thursday trade from $1.0622 Wednesday in New York, while falling to 130.22 yen from 130.33 yen.
Expectations of more ECB action come as the Federal Reserve appears set to go in the opposite direction and raise interest rates as early as next month.
"The prospect of a historically large divergence between US and eurozone monetary policy looks set to push the single currency below parity against the dollar for the first time since late 2002," Capital Economics said a commentary.
In other trading, the dollar edged down to 122.64 yen, off 122.70 yen Wednesday in New York, but higher than levels seen in Asia earlier in the day.
The greenback was boosted from slight gains in a series of US economic indicators -- including October consumer spending and new-home sales -- which support a move by the Fed to hike rates before 2016.
Investors were moving out of safe-haven assets, particularly the yen, as tensions over the Turkish downing of a Russian war plane eased.
"Overnight, markets remained relatively calm in the absence of further inflammatory geopolitical headlines," Kymberly Martin, a senior market strategist at the Bank of New Zealand, said in a client note.
"US data delivery was sufficiently close to expectation so as not to cause much response, in a market seemingly already winding down for the Thanksgiving long weekend."
Among the decliners, higher-yielding emerging markets currencies ticked down against the US unit.
The Indonesian rupiah lost 0.33 percent, the South Korean won was down 0.19 percent, and the Thai baht and Malaysia's ringgit each fell 0.10 percent. The Taiwan and Singapore dollar were also lower against the US currency.
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