The euro declined to a six-week low versus the dollar as European Central Bank President Mario Draghi said officials discussed an interest-rate cut at today’s policy meeting.
The 17-nation currency also weakened against the yen as Draghi, speaking after the ECB kept borrowing costs at a record-low 0.5 percent, said he would consider a further reduction if money-market rates climbed too high. The dollar rose through 100 yen for the first time since July on speculation signs of improvement in the U.S. economy will compel the Federal Reserve to taper stimulus as early as this month. Foreign-exchange trading surged to an average $5.3 trillion a day in April 2013, a Bank for International Settlements report showed.
“Draghi is still not very confident about the economic recovery, and that’s contributing to the weakness in the euro,” Douglas Borthwick, head of foreign exchange at Chapdelaine & Co. in New York, said in a telephone interview. “The market knows very well that the ECB is going to be on hold with a bias towards lower rates for the foreseeable future.”
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