EUR/USD Below 1.23 on ECB Bets

The euro was 0.2 percent from the lowest in more than two years against the dollar amid speculation the European Central Bank will expand stimulus measures as the Federal Reserve moves toward raising interest rates.

The single currency was set for weekly losses against most of its 16 major peers before German data forecast to show producer prices dropped. The yen fell for a third day toward a seven-year low against the dollar before Bank of Japan Governor Haruhiko Kuroda speaks today at the end of a two-day meeting. The Bloomberg Dollar Spot Index was near a five-year high. The Swiss franc slid the most in 18 months versus the euro yesterday after the Swiss National Bank introduced negative rates.

“The ECB is likely to take some kind of action in the first quarter and that will drag European yields lower,” said Naohiro Nomoto, an associate for currency trading at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “The euro looks to be the sole mover on speculation there may be something coming early in the year.”

Bloomberg

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