The euro weakened against the yen and
the dollar as investors judged European Central Bank President
Mario Draghi failed to announce sufficient new measures to
contain the region’s debt crisis.
The common currency declined versus 12 of its 16 major counterparts as Draghi told reporters in Frankfurt that there was “severe malfunctioning” in the region’s debt markets. He spoke after the central bank kept its benchmark interest rate on hold. The pound strengthened for the first time in three days against the euro after the Bank of England kept its bond-buying program and benchmark rate unchanged.
“There was a lot of talk but no actions, there was nothing of substance, no silver bullet,” said Neil Jones, head of European hedge-fund sales at Mizuho Corporate Bank Ltd. in London. “The market was looking for more. This is a straight euro sell in my mind.”
The euro dropped 0.5 percent to 95.45 yen at 9:27 a.m. in New York after rising as much as 1.1 percent. The single currency declined 0.2 percent to $1.2197. It earlier climbed 1.5 percent to $1.2405 the highest level since July 5. The dollar dropped 0.2 percent to 78.26 yen.
Bond yields that throw into question the future of the euro are “unacceptable” and “need to be addressed in a fundamental manner,” Draghi said at the press conference.
The euro strengthened in earlier trading as the ECB kept its benchmark interest rate at 0.75 percent at a policy meeting today, in line with the forecast of 51 of 55 analysts surveyed by Bloomberg News. Four predicted a reduction to 0.5 percent.
Draghi pledged last week to “do whatever it takes” to preserve the common currency, stoking speculation that policy makers will intervene in bond markets to support ailing euro- area economies.
The pound rose against the euro after the U.K. Monetary Policy Committee maintained its bond-buying program at 375 billion pounds and left interest rates at a record-low 0.5 percent, in line with the median forecasts in Bloomberg surveys.
Sterling gained 0.3 percent to 78.45 pence per euro. The U.K. currency was little changed at $1.5536.
The yen appreciated against all its major peers as European shares and U.S. stock futures declined, boosting demand for the relative safety of Japan’s currency. The Stoxx Europe 600 Index (SXXP) dropped 1.2 percent and futures on the Standard & Poor’s 500 Index fell 0.7 percent.
The euro has weakened 4.7 percent in the past six months, the worst performance of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen gained 0.7 percent and the dollar strengthened 3.6 percent.
The common currency declined versus 12 of its 16 major counterparts as Draghi told reporters in Frankfurt that there was “severe malfunctioning” in the region’s debt markets. He spoke after the central bank kept its benchmark interest rate on hold. The pound strengthened for the first time in three days against the euro after the Bank of England kept its bond-buying program and benchmark rate unchanged.
“There was a lot of talk but no actions, there was nothing of substance, no silver bullet,” said Neil Jones, head of European hedge-fund sales at Mizuho Corporate Bank Ltd. in London. “The market was looking for more. This is a straight euro sell in my mind.”
The euro dropped 0.5 percent to 95.45 yen at 9:27 a.m. in New York after rising as much as 1.1 percent. The single currency declined 0.2 percent to $1.2197. It earlier climbed 1.5 percent to $1.2405 the highest level since July 5. The dollar dropped 0.2 percent to 78.26 yen.
Bond yields that throw into question the future of the euro are “unacceptable” and “need to be addressed in a fundamental manner,” Draghi said at the press conference.
The euro strengthened in earlier trading as the ECB kept its benchmark interest rate at 0.75 percent at a policy meeting today, in line with the forecast of 51 of 55 analysts surveyed by Bloomberg News. Four predicted a reduction to 0.5 percent.
Draghi’s Pledge
The euro fell from today’s high of $1.2405 to the low of $1.2174 within 30 minutes as Draghi spoke to reporters in Frankfurt after the central bank’s policy decision.Draghi pledged last week to “do whatever it takes” to preserve the common currency, stoking speculation that policy makers will intervene in bond markets to support ailing euro- area economies.
The pound rose against the euro after the U.K. Monetary Policy Committee maintained its bond-buying program at 375 billion pounds and left interest rates at a record-low 0.5 percent, in line with the median forecasts in Bloomberg surveys.
Sterling gained 0.3 percent to 78.45 pence per euro. The U.K. currency was little changed at $1.5536.
The yen appreciated against all its major peers as European shares and U.S. stock futures declined, boosting demand for the relative safety of Japan’s currency. The Stoxx Europe 600 Index (SXXP) dropped 1.2 percent and futures on the Standard & Poor’s 500 Index fell 0.7 percent.
The euro has weakened 4.7 percent in the past six months, the worst performance of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen gained 0.7 percent and the dollar strengthened 3.6 percent.
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