Euro heading for strongest level against dollar since January 2015

On Friday bonds gained and the euro headed for its strongest level against the dollar since January 2015 on bets the European Central Bank will start tapering its stimulus program. European stocks fell as the common currency’s rally weighed on car makers and other exporters.

The euro gained impetus after ECB President Mario Draghi said Thursday that the central bank will discuss in the autumn plans to unwind quantitative easing. Copper led an advance in industrial metals and oil headed for a second weekly advance.

Increased hawkishness from the ECB has helped the euro rally from lows last seen near the start of the millennium, with investors expecting tapering to start in the new year and pricing in a 10 basis point rate hike by September 2018. In the U.S., politics are again at the forefront, with reports that U.S. special counsel Robert Mueller is expanding his investigation of Trump less than a day after the president told the New York Times that any digging into his finances would cross a red line.

The yield on U.S. 10-year Treasuries fell two basis points to 2.24 percent. Benchmark yields in Germany dropped three basis points to 0.5 percent, down nine points this week. Yields in France dipped four basis points.

The Stoxx Europe 600 dropped 0.4 percent, with with automobile stocks losing 1.7 percent and construction and bank shares also declining. The gauge is heading for its first weekly decline in three. Futures on the S&P 500 Index were little changed after the underlying gauge closed flat Thursday.

Oil headed for a second weekly increase as U.S. crude inventories continued to shrink. West Texas Intermediate was 0.4 percent higher at $47.09 a barrel. Copper advanced 1.3 percent to $6,036 a ton, a four month high, leading a rally in industrial metals. Gold was poised for its first back-toback weekly advance since June 2.