Euro Drops after Draghi Hints at Intervention Measures

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Euro Drops after Draghi Hints at Intervention MeasuresThe euro fell after European Central Bank President Mario Draghi said he would press for expansion of stimulus measures if necessary and push for structural reforms.

The shared currency plunged 0.4 percent to trade at $1.2681 at 2:37 p.m. in New York after earlier advancing up to 0.5 percent. The euro fell 0.7 percent to 136.70 yen. The dollar dropped 0.3 percent to steady at 107.81 yen after earlier hitting 107.53, its weakest level since Sept. 17.

“Whenever Draghi speaks, people expect it to be euro negative,” Robert Sinche, a Stamford, Connecticut-based global strategist at Pierpont Securities LLC, told Bloomberg News. “There will be this continued discussion about a currency being a lever that’s left for them. Fiscal-policy levers aren’t there, monetary-policy levers aren’t there, so the exchange rate is one of the few levers that can probably be pulled.”

The dollar also pared its losses after U.S. jobless claims dropped last week. Fresh U.S. jobless claims fell 1,000 to 287,000 in the week through Oct. 4, reported the Washington-based Labor Department on Thursday. The four-week median fell to 287,759, the weakest level since February 2006.

Meanwhile, the rupee rose 0.6 percent to 61.055 per dollar after advancing 0.8 percent, the fastest since June 19 on speculation the Federal Reserve won’t hike interest rates soon and hence investors will continue investing in Indian assets. The rupee has surged 1.2 percent in the fourth quarter.

The Australian dollar depreciated 0.9 percent to trade at 87.66 cents after earlier surging to 88.99 cents. The pound rose against the euro after the Bank of England retained its benchmark interest rate at 0.5 percent, a record-low. The sterling advanced 0.1 percent to trade at 78.72 pence per euro after touching 78.997 pence on Wednesday, its lowest level since Sept. 18. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com