After the European Central Bank President Mario Draghi signaled monetary policy will diverge from the U.S. for an extended period of time, the U.S. dollar climbed to an almost nine-month high against the euro. The currency was up against the majority of its 16 major counterparts after unemployment claims sagged, pushing the average over the past month to an eight-year low, reports Bloomberg.
Charles St-Arnaud, London-based senior economist at Nomura Securities International Inc., said of the ECB president, "He's mentioned a few times the divergence in monetary policies — in a way, he's trying to send the euro lower, he just wants to remind the market fundamentals are not supporting the euro. The initial jobless claims numbers were excellent. They're back to pre-crisis levels," according to Bloomberg.
The dollar climbed 0.3 percent to $1.3340 per euro after trading at the strongest since November 8 at $1.3333 yesterday. The yen dropped 0.3 percent to 102.37 per dollar. Meanwhile, Australia's dollar was down to its lowest in a month against the greenback as traders revived bets that the nation's central bank will trim interest rates after a sharp increase in unemployment claims.
According to Reuters, markets will keep a close eye on how ECB President Mario Draghi characterizes the current condition of the economy, while risks to Germany's economy are rising. It may also be possible that the effect of Russian sanctions has lowered the ECB's outlook.
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