EUR/USD Drops to 1.2380 on Draghi’s Stimulus Pledge

The euro fell to a more than two-year low as European Central Bank President Mario Draghi deepened his commitment to stimulus and signaled policy makers are ready to implement additional measures if needed.

Europe’s shared currency dropped for the first time in six days versus the yen as Draghi told reporters in Frankfurt that the central bank’s bond-buying program will last at least two years and, together with targeted loans, move its balance sheet toward early-2012 levels. The pound weakened to a 14-month low as the Bank of England left interest rates unchanged. The dollar rose to its highest since April 2009 before jobs data tomorrow. Russia’s ruble slid.

“Draghi’s trying to prepare the market for what he sees as a very likely expanded program of quantitative easing, maybe not in size but in terms of the assets purchased,” said Collin Crownover, the head of currency management at State Street Global Advisors Inc. “The fall in the euro, while not massive in historical terms, has been pretty significant. I think we drift a little bit lower but I think we’ll struggle to touch $1.20 this year.”


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