ECB Promotes Exodus as Euro Outflows at Record Pace

For European Central Bank President Mario Draghi, the price of a weaker euro to boost the economy and stave off deflation is a record exodus from the continent’s financial assets.

Domestic and foreign investors spurred 187.7 billion euros ($239 billion) of fixed-income outflows from the euro area in the six months through August, the most in ECB data going back to the currency’s debut in 1999. That’s helped push the euro down 2.6 percent versus a basket of nine developed-market peers tracked by Bloomberg Correlation-Weighted Indexes this year, the biggest decline since 2010, when the euro-region debt crisis was taking hold.

“Foreign demand and domestic investor demand have been equally negative, and looking ahead they’ll be significant factors in driving a weaker euro,” Phyllis Papadavid, a senior global-currency strategist at BNP Paribas SA in London, said by phone on Oct. 21. “The euro is going to be one of the key underperformers in the Group of 10 universe.”


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