LONDON (AFX) - The euro was rangebound in early trade with investors on the sidelines ahead of the European Central Bank rate verdict, dealers said.
They said the ECB is not expected to cut rates, making any likely impact of the actual announcement muted.
Still ahead is the U.S jobless claims data which could be market moving, they added.
"The euro is rangebound in the 0.8910 to 0.9020 range and I don't think it will get through that range(without major news)," Adrian Schmidt, a currency strategist at Royal Bank of Scotland said.
"There is market talk that the ECB may even be ahead of the curve following yesterday's strong U.S. housing data," Michael Klawitter, a currency strategist at West LB said.
"The fact that euro held very stable against the dollar despite the renewed turmoil in Argentina, confirms our view that the underlying sentiment for the euro has clearly improved," he added.
"Given the clear chance that the Fed will cut rates by 50 basis points on May 15, we strongly recommend to reduce any overweighting in dollars," Klawitter said.
Sterling was slightly stronger despite increasing expectations of a rate cut by the Bank of England after yesterday's surveys showing the manufacturing sector under pressure, dealers said.
"Cable is firmer, pressing against 1.4420 but I don't think it will get higher unless the euro moves higher," Schmidt at Royal Bank of Scotland said.