LONDON, Nov 5: The euro inched higher against the dollar on Wednesday ahead of an expected interest rate cut by the European Central Bank, which some traders saw as a potential boon for equity markets.

The single European currency in late-day trade was at $1.3037 against $1.2975 late Tuesday in New York.

The dollar was meanwhile trading at 98.96 yen after 99.69 on Tuesday.

With the US presidential election now out of the way, investors were awaiting an interest rate cut on Thursday by both the ECB and the Bank of England.

But the impact of an ECB reduction on the euro was far from clear.

“The market has gone all bipolar about interest rates,” noted analysts at Moneycorp.

“One day the threat of a rate cut sends a currency down because falling yields are a disincentive to hold it.

In trading here on Wednesday, the euro changed hands at $1.3037 against $1.2975 late Tuesday, 128.88 yen (129.36), 0.8059 pounds (0.8138) and 1.5132 Swiss francs (1.5085).

The dollar stood at 98.96 yen (99.69) and 1.1618 Swiss francs (1.1622).—AFP