The euro rallied to a two-month high against the dollar after European Central Bank President Mario Draghi said inflation is expected to rise gradually, damping bets policy makers will introduce further monetary stimulus.
The 18-nation currency advanced versus all except one of its 16 major counterparts as the central bank predicted economic growth will accelerate. The yen dropped to a five-week low versus the greenback after an advisory panel said Japan’s Government Pension Investment Fund no longer needs to focus on domestic bonds. The dollar fell versus most of its major peers before a nonfarm payrolls report tomorrow that is forecast to show jobs growth in February trailed last year’s average.
“A large part of the market was expecting some form of action from the ECB today, or some indication that monetary easing would be coming in the very near future,” Omer Esiner, chief market analyst in Washington at the currency brokerage Commonwealth Foreign Exchange Inc., said in a phone interview. “We didn’t get either of those things, which is why the euro is trading higher across the board.”
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