The euro rose against most of its 16 major peers after two central bank officials said European Central Bank President Mario Draghi will announce unlimited sterilized bond buying to quell the region’s debt crisis.
The 17-nation currency climbed to a two-month high against the dollar last week amid optimism Draghi would announce additional monetary stimulus at tomorrow’s ECB meeting. Australia’s currency dropped to a seven-week low after the economy expanded less than forecast. Norway’s krone fell after manufacturing contracted for a third month amid dwindling demand from Europe. Canada’s dollar remained lower after the nation’s central bank kept its interest-rate target unchanged.
“Unlimited and sterilized sounds good because it shows they’re willing to support these sovereigns,” said Eric Viloria, senior currency strategist for Gain Capital Group LLC in New York. “Draghi talked about bond buying at the last meeting, so there has been a lot of optimism priced in and the euro has already moved higher. It could be buy-the-rumor, sell- the-fact.”
The euro rose 0.3 percent to $1.2598 at 9:13 a.m. New York time, after falling as much as 0.5 percent. It reached $1.2638 on Aug. 31, the strongest since July 2. The shared currency gained 0.3 percent to 98.82 yen. Japan’s currency was little changed at 78.42 per dollar.
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