Draghi Warns of Slowing Inflation as Euro Falls to Below 1.34

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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