“The euro strengthened to a four-week high versus the dollar amid speculation European Central Bank President Mario Draghi will today reassure investors the region’s economy will recover later this year.
Europe’s shared currency rose against most of its 16 major counterparts after the ECB refrained from cutting its main refinancing rate at its monthly policy meeting. The pound advanced for a second day against the dollar as the Bank of England left its asset-purchase target and benchmark rate unchanged. The Australian dollar slid to the weakest level since 2011 as the nation’s shrinking interest-rate advantage over its peers reduced the currency’s allure.
“Given that some indicators have improved and financial conditions are better Draghi might have a more moderate tone,” said Chris Walker, a currency strategist at Barclays Plc in London. “The euro is at the top of its recent range. At the same time, the medium-term growth outlook isn’t that good.”
The euro rose 0.2 percent to $1.3121 at 12:47 p.m. London time after advancing to $1.3131, the highest level since May 9. The single currency advanced 0.2 percent to 129.97 yen. The yen was little changed at 99.07 per dollar after appreciating to 98.84, the strongest since May 9.
JPMorgan Chase & Co.’s Group-of-Seven Volatility Index, based on currency option premiums, fell to 10.08 percent after rising to 10.24 percent on May 31 and June 3, the highest level since Feb. 26.
