By Doris Yu
Investing.com – The dollar was down on Thursday morning in Asia as the European Central Bank is poised to hike interest rates for the first time since 2011 and the key Russia gas pipeline is scheduled to reopen later in the day.
The US Dollar Index that tracks the greenback against a basket of other currencies edged down 0.19% to 106.87 by 11:44 PM ET (3:44 AM GMT).
The euro held gains this week as investors expect the ECB might deliver a 50 basis-point rate hike. Also, the Nord Stream pipeline reopens on Thursday following a 10-day maintenance shutdown.
Investors debated on whether ECB policymakers will deliver a previously signaled 25 basis-point increase or a half-point rise to curb runaway inflation. The central bank is also likely to unveil its new crisis management tool.
"Italy's political uncertainty complicates the ECB plans to deliver details on its new anti-fragmentation tool, especially regarding the conditions for the tool to be triggered," and a lack of clarity is likely to drag on the euro, National Australia Bank currency strategist Rodrigo Catril wrote in a client note.
At the same time, NAB expects a half-point hike and guidance for another half-point increase in September "with the Bank aiming to front-load rate hikes ahead of weaker conditions later in 2022 and into 2023, when room to move may be more limited," Catril said.
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