The euro fell the most since July against the dollar after European Central Bank President Mario Draghi said the recent strength of the currency creates a concern that inflation will slow.
The 17-nation euro declined versus all but two of 16 major counterparts as Draghi said after a policy meeting in Frankfurt that the risk to the region’s growth remains on the “downside.” The pound strengthened for a second day after future Bank of England Governor Mark Carney damped speculation he would expand stimulus. New Zealand’s dollar weakened after a government report showed employers cut jobs last quarter. Brazil’s real rose the most of the greenback’s 16 major peers.
“The euro area can ill afford a stronger currency,” Aroop Chatterjee, a currency strategist at Barclays Plc in New York, said in a telephone interview. Draghi “explicitly mentioned foreign-exchange as a risk. That in itself was a big deal and wasn’t expected by most market participants.”
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