European Central Bank President Mario Draghi’s comments have pushed the euro to a three-month low versus the greenback. Draghi recently said that the central bank may move in to tame the persistently low inflation this June.
By 11:37 a.m. in New York, the euro was trading at $1.3653 after earlier declining to $1.3615, the lowest since February 13. The 18-nation currency rose 0.1 percent to trade at 139.09 yen after earlier touching 138.15 on Wednesday, the weakest since February 6. The yen was trading at 101.89 per US dollar after declining to 102.05, the least since May 15.
The euro took a hit after euro-sceptic parties gained an upper hand in the European Union parliament’s elections. The yen fell after the Deputy Chief of Bank of Japan Kikuo Iwata said that a stronger yen would hurt the country’s exports.
“Given the low levels of inflation that Europe has, and the growth signals that they’re getting right now, there’s enough justification for negative interest rates,” Shaun Osborne, a Toronto-based chief currency strategist at Toronto-Dominion Bank, told Bloomberg. “Beyond that I think what Draghi seems to be saying, is they need to see how things pan out, particularly on the inflation front, before they can reckon with any other measures.”
The euro has plunged 1.4 percent over the last four weeks, making it the second worst performing currency after the Swiss franc out of the 10 advanced-economy currencies monitored by Bloomberg Correlation-Weighted Indexes. The yen has gained 0.4 percent while the dollar has accelerated 0.1 percent.
Financial markets in UK and the US were shut for national holidays on Monday. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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