Euro extends run higher with 13-month dollar high

LONDON: The euro led a broad advance in currencies against the greenback Thursday after a string of central bankers hinted at an end to loose monetary policies that have been in place since the financial crisis.

The single currency powered to a 13-month high Thursday, building on Wednesday’s 12month peak after European Central Bank boss Mario Draghi offered a more positive economic outlook for the eurozone than expected, with traders brushing off later attempts by his officials to play down his remarks.

The euro jumped Thursday to $1.1435 -- the highest level since May 2016 -- as markets bet the ECB, finally seeing a recovery in the eurozone economy after years of weakness, will soon begin winding down its stimulus.

Against the Japanese currency, the euro reached a 16-month peak at 128.79 yen.

Most European stock markets were meanwhile lower heading into the half-way stage.

“The pound and euro’s central bank-driven gains remained the focus of trading this Thursday,” said Connor Campbell, an analyst at Spreadex.

The outlook from the ECB comes as several central bank bosses have this week hinted at tightening policies put in place to combat the hammering that the global economy took from the financial crisis that started around a decade ago.

Sterling powered higher Wednesday after Bank of England chief Mark Carney hinted at a rate hike, which took dealers by surprise and distracted them from British political uncertainty caused by the recent UK general election and Brexit.

Similar comments from the head of Canada’s central bank provided a boost to the country’s dollar, while rising commodity prices and talk of an Australian rate lift supported the Aussie.

Asian currencies benefited also from the broad dollar weakness, which comes as US President Donald Trump’s economy-boosting agenda looks on the ropes as he struggles to push through crucial health care reform.