The dollar strengthened against its major rivals Monday as comments from the European Central Bank’s top economist in an interview published over the weekend suggested that the door to more stimulus from the ECB remains open.
The remarks support the idea that, even though the Federal Reserve opted not to raise interest rates at its meeting last week, the Fed will still likely be the first major central bank to begin normalizing its monetary policy.
The euro EURUSD, +0.0894% fell to an 11-day low of $1.1181, but trimmed its losses slightly to $1.1193 in late Monday trade in New York. That represented a 1% decline from $1.1309, its level late Friday.
The dollar USDJPY, -0.16% also strengthened against the yen, rising 0.5% to ¥120.55, compared with ¥120 late Friday.
The ICE U.S. dollar index DXY, -0.13% which measures the dollar’s strength against a basket of six rivals, rose 1.1% to 95.8810.
Peter Praet, executive board member and chief economist of the ECB, told a Swiss newspaper that the central bank is ready to expand its program of asset purchases, which currently involves buying €60 billion ($68 billion) in public and private debt every month. The program is currently slated to end in September 2016.
The interview echoed remarks from the central bank’s most recent news conference, when ECB President Mario Draghi hinted that more stimulus could be forthcoming.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.