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EUR/USD Below 1.27 after Draghi Cites ‘Excessively Low’ Inflation

The euro declined for the first time in four days as European Central Bank President Mario Draghi called for structural reforms in the region and pledged to expand stimulus measures if needed.

The greenback gained against 12 of its 16 major peers as Goldman Sachs Group Inc. sees it strengthening more versus the euro, yen and three other peers in revised 12-month forecasts. The U.S. currency erased earlier losses after initial jobless claims unexpectedly fell last week. The yen touched a three-week high as investors pushed back bets for when the Federal Reserve will increase interest rates.

“Whenever Draghi speaks, people expect it to be euro negative,” Robert Sinche, a global strategist at Pierpont Securities LLC in Stamford, Connecticut, said by phone. “There will be this continued discussion about a currency being a lever that’s left for them. Fiscal-policy levers aren’t there, monetary-policy levers aren’t there, so the exchange rate is one of the few levers that can probably be pulled.”

Bloomberg [1]

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