Dollar gains against euro ahead of ECB meet

The dollar strengthened against the euro in Asia on Wednesday as skittish short-term investors took profit ahead of a European Central Bank (ECB) meeting, analysts said. The euro changed hands at $1.4810 in afternoon Asian trade from $1.4823 in New York on Tuesday. Against the Japanese yen, the European currency bought 119.79 yen from 120.02, and the greenback traded at 80.89 yen from 80.98. "Most likely there is some profit-taking, because Thursday there will be an ECB meeting so speculators could be taking profit," said Simon Teo, a senior currency dealer at Phillip Futures in Singapore. Analysts said the ECB was expected to keep its key interest rate at 1.25 percent when it meets, but might signal a further increase amid climbing prices in the 17-nation eurozone. They expect the ECB governing council, gathering in Helsinki for one of two annual meetings away from the bank's headquarters in Frankfurt, to hint at more rate hikes, with the first possibly as soon as June. However, speculators were still playing it safe, Teo told AFP. "If let's say the ECB disappoints on the rate hike, euro will come down quite hard Speculators, short term traders, they may want to avoid the event risk," he said. Teo said the fall in the euro's value "is not a very strong drop, not so significant" and that it was well-supported. "We can see quite a strong support for the euro at $1.4750," he said. The dollar rose to Sg$1.2295 from Sg$1.2252 on Tuesday, to 30.06 Thai baht from 29.91, to 8,550.00 Indonesian rupiah from 8,542.00 and to 42.96 Philippine pesos from 42.82. However, it fell to Tw$28.56 from Tw$28.57 a day ago.