“The only thing Draghi did not say was that the euro is ‘brutally high,’”
The euro swung to a loss against the dollar, buying $1.3859 from $1.3904 late Wednesday. The shared currency had earlier hit an intraday high of $1.3967, according to FactSet.
“The strengthening of the effective euro exchange over the past one and a half years has certainly had a significant impact on our low rate of inflation and, given current levels of inflation, is therefore becoming increasingly relevant in our assessment of price stability,” Draghi said Thursday in a speech in Vienna .
Draghi had quantified the impact of the exchange rate on inflation after last week’s ECB meeting, when the bank held rates steady. The euro has gained about 9% against the dollar since its lowest level in 2012 and that rise has weighed on the current inflation rate by about 0.4%, he said.
The ICE dollar index , which tracks the U.S. unit against six rivals, was at 79.612 from late Wednesday’s level of 79.614. The WSJ dollar index , a gauge of the greenback’s strength against a broader basket of currencies, fell to 73.25 from 73.40.
Improving economic data help bolster the case for the U.S. central bank to continue reducing bond purchases and eventually hike interest rates, which have been seen as pressuring the greenback’s value.
But with overall unemployment levels still high and inflation rates low, Stanley Fischer, who is U.S. President Barack Obama’s nominee to be vice chairman of the Fed, said Wednesday he backs the central bank’s easy-policy stance.
The British pound was at $1.6624 versus $1.6619.
The Australian dollar rose to 90.23 U.S. cents from 89.87 U.S. cents, extending gains after Australia posted monthly jobs growth that outstripped expectations.
The dollar against the Japanese yen fell to ¥102.62 from ¥102.76.