The euro rose from its lowest in almost a year as speculation cooled that that the European Central Bank will add further monetary stimulus when it meets next week.
The 18-nation currency gained for the first time in four days versus the dollar after a Reuters report citing unidentified ECB sources said the central bank is unlikely to add stimulus unless an August inflation report raises the risk of deflation. Germany’s finance minister Wolfgang Schaeuble said yesterday that comments by ECB President Mario Draghi advocating support for euro-zone fiscal policy were “over-interpreted.” South Africa’s rand rose to the highest this year verus the euro, while the New Zealand dollar rallied.
“The euro is retracing some of Friday and Monday’s move lower,” said Richard Franulovich, the chief currency strategist for the northern hemisphere at Westpac Banking Corp. in New York. “That was after Draghi set those expectations at Jackson Hole. We’re now seeing the somewhat inevitable pushback.” Draghi spoke in Jackson Hole, Wyoming, on Aug. 22.
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