March 19, 2018 / 2:43 PM / 7 months ago

FOREX-Euro gains on report of ECB rate-hike debate; sterling jumps

    * Euro rises on report ECB shifting debate to rate hikes
    * Sterling jumps as EU-Britain reach transition agreement
    * Traders speculate on Fed's signal on rate-hike path

 (Update market action, change dateline, previous LONDON)
    By Richard Leong
    NEW YORK, March 19 (Reuters) - The euro rose on Monday after
a Reuters report that European Central Bank officials were
shifting their debate from bond purchases to the expected path
of interest rates, reviving bets that the ECB may raise rates
sooner than previously thought.
    Sterling pushed to its highest level against the euro in
more than five weeks and against the dollar in more than a
month, as Britain and the European Union appeared to reach a
broad agreement on a post-Brexit transition period and the Irish
border.
    "It makes people more comfortable with the euro's strength,
as people will monitor for any shift in ECB policymakers' tone,"
Chuck Tomes, senior investment analyst at Manulife Asset
Management in Boston, said of the Reuters source-based report.
    The debate among ECB policymakers is increasingly about the
steepness of the rate path, as some want future expectations
contained given the slow rebound in inflation, five sources with
direct knowledge of the discussion told Reuters.
    At 10:18 a.m. (1418 GMT), the single currency was
last up 0.23 percent, at $1.2315.
    But the euro weakened against the pound on relief over the
latest development in the talks between Britain and the European
Union agreement, which raised optimism about a smoother
departure for Britain from the trading bloc.
    Sterling was last up 0.49 percent at 87.66 pence per
euro. It was up 0.75 percent, at $1.4045.
    "That's a positive for the British pound. It has the
potential to strengthen further," Tomes said.
    The strength in euro and sterling put downward pressure on
the dollar as traders speculated whether the Federal Reserve may
signal a faster pace of rate increases in the coming months as
the labor market tightens further.
    The Federal Open Market Committee, the central bank's
policy-setting group, will meet on Tuesday and Wednesday. Rates
futures imply traders have fully priced in a rate increase which
would raise the target range to 1.50 percent to 1.75 percent.

    The dollar index, which tracks the greenback versus a
basket of six currencies, fell 0.228 points or 0.25 percent, to
90.005.
========================================================
    Currency bid prices at 10:21AM (1421 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.2314        $1.2287     +0.22%         +2.65%      +1.2325     +1.2259
 Dollar/Yen       JPY=        106.1000       106.0000    +0.09%         -5.83%      +106.3000   +105.6800
 Euro/Yen         EURJPY=     130.66         130.24      +0.32%         -3.34%      +130.9600   +129.6100
 Dollar/Swiss     CHF=        0.9505         0.9520      -0.16%         -2.44%      +0.9551     +0.9504
 Sterling/Dollar  GBP=        1.4046         1.3939      +0.77%         +3.95%      +1.4087     +1.3914
 Dollar/Canadian  CAD=        1.3092         1.3095      -0.02%         +4.09%      +1.3124     +1.3048
 Australian/Doll  AUD=        0.7703         0.7715      -0.16%         -1.26%      +0.7725     +0.7687
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1708         1.1699      +0.08%         +0.16%      +1.1734     +1.1694
 Euro/Sterling    EURGBP=     0.8765         0.8815      -0.57%         -1.33%      +0.8818     +0.8745
 NZ Dollar/Dolar  NZD=        0.7223         0.7215      +0.11%         +1.93%      +0.7229     +0.7197
 Dollar/Norway    NOK=        7.7367         7.7131      +0.31%         -5.73%      +7.7526     +7.7137
 Euro/Norway      EURNOK=     9.5287         9.4840      +0.47%         -3.25%      +9.5347     +9.4778
 Dollar/Sweden    SEK=        8.1800         8.1914      +0.08%         -0.27%      +8.2261     +8.1792
 Euro/Sweden      EURSEK=     10.0736        10.0652     +0.08%         +2.38%      +10.0988    +10.0640
    

    
 (Additional reporting by Saikat Chatterjee, Tommy Wilkes in
London
Editing by Larry King and Meredith Mazzilli)
  
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