The euro fell for the first time in five days against the dollar after European Central Bank President Mario Draghi said policy makers may take the unprecedented step of charging banks to hold excess reserves.
The single currency dropped against all except one of its 16 most-traded peers as the ECB cut its main refinancing rate and Draghi said policy makers had an open mind on a negative deposit rate. The dollar rose the most in almost two weeks versus the yen after number of Americans filing claims for jobless benefits unexpectedly dropped to a five-year low. Sweden’s krona slid as manufacturing in the nation shrank.
A deposit rate below zero “would be a potential game- changer for the ECB,” Joe Manimbo, a market analyst at Western Union Business Solutions, a unit of Western Union Co., said in a phone interview from Washington. “It would compel banks to flood the financial system over there with euros, which would inherently put downward pressure on the single currency.”
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