The euro pared gains as Mario Draghi said the European Central Bank will implement its bond-buying program “in full.”
The common currency was little changed against the dollar after earlier rising 0.8 percent to the highest in almost three months. Draghi, the ECB president, said in a speech in Washington that the central bank’s unconventional measures have proven effective, and low interest rates haven’t yet led to financial imbalances.
“Draghi is giving some much-needed confidence to the European Union quantitative easing trade theme,” said Matt Derr, a foreign-exchange strategist at Credit Suisse Group AG in New York. “He’s trying to push back on some speculation that the ECB could taper their QE purchases before the September 2016 end date.”
The common currency gained 0.1 percent to $1.1368 as of 1:17 p.m. in New York. It climbed 0.2 percent to 135.52 yen.
The euro rose for four of the last five weeks against the dollar as European economic growth and stabilizing inflation contrasted with tepid U.S. economic data. Before that, the common currency had fallen 20 percent from July to March as a stagnant euro region that prompted ECB stimulus measures had diverged from an accelerating U.S. economy that put the Federal Reserve on the path toward raising interest rates, causing the dollar to rise.
“We will implement in full our purchase program as announced and, in any case, until we see a sustained adjustment in the path of inflation,” Draghi said.
The 19-member currency advanced 2.4 percent in the past month, bringing its loss over the past year to 6.5 percent, according to Bloomberg Correlation-Weighted Indexes. The dollar is the best performer among 10 developed-nation peers tracked by the index, rallying 15.1 percent in the past year.
The euro will probably trade within a range from $1.13 to $1.17 in the near term, Robert Sinche, a strategist at Amherst Pierpont Securities LLC in Stamford, Connecticut, said in a phone interview.
“Fears of a spiraling deterioration in Europe have faded,'' Sinche said. ‘‘The next leg up for the dollar would have to come from dollar strength rather than euro weakness.’’