The euro, on Thursday, June 29, jumped past $1.14 to its highest in just under 14 months, with attempts by European Central Bank sources to moderate the message taken from a speech by President Mario Draghi this week falling on deaf ears.
Three days of the biggest gains in more than a year for the single currency have pushed the broader dollar index to its lowest since October and prompted some of the market’s biggest dollar supporters to call the currency’s rally over.
By 07;30 GMT, the euro was trading 0.4 percent stronger at $1.1425, having broken briefly above last year’s June high of $1.1428. It was also 0.4 percent higher against the yen at 128.275 yen.
Draghi’s speech on Tuesday – coming amid a raft of hawkish signals from other major global central banks – convinced markets the ECB was preparing to start withdrawing its own emergency stimulus for the euro zone economy later this year.
After a long run lower, that has put the euro back in relatively uncharted territory, with some analysts arguing there is little technical resistance beneath $1.20.
“The biggest test will be 1.1500,” said RBC’s head of global FX strategy Elsa Lignos.
“Though month-end USD selling may reinforce the bearish USD sentiment in the next few days, we still think EUR’s rally is more likely to run out of steam at 1.15.”
The other big gainers among the G10 group of major developed world currencies over the past 24 hours were the Canadian dollar and sterling, both also driven by comments by their respective central bank governors.
Sterling gained another half a percent in morning trade in London, stopping just shy of its first break above $1.30 in five weeks.
