- Region's economy maintains growth, Markit survey shows
- `We shouldn’t act in a too-active way,' Nowotny says
The euro climbed against most of its major counterparts as European Central Bank President Mario Draghi said more time is needed to judge whether further monetary stimulus is required.
The common currency rose from a three-week low versus the dollar as Draghi added to a chorus of policy makers urging caution on added easing, telling the European Parliament in Brussels that the central bank’s bond-buying plan "has sufficient built-in flexibility." The euro-area economy probably maintained its rate of expansion in the third quarter and will continue to grow amid rising orders and backlogs of work for factories and services, according to Markit Economics.
“It doesn’t sound as though he’s rushing to extend or pursue even more aggressive language and rhetoric,” Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London, said of Draghi. “We’ve seen a little bit of a bias toward euro-dollar shorts over the course of the last couple of sessions; we’re now just seeing a little paring of that.” A short position is a bet a currency will weaken.
The euro advanced 0.6 percent to $1.1186 as of 5 p.m. New York time. Europe’s single currency added 0.7 percent to 134.54 yen, the first gain in four days.
“The euro’s one of the few currencies that are doing better than the dollar today,” said Sireen Harajli, a currency strategist at Mizuho Bank Ltd. in New York.
ECB Governing Council member Ewald Nowotny earlier said he’s wary of increasing monetary stimulus any time soon. Additional bond-buying would tend to lower interest rates and reduce the relative allure of euro-denominated debt.
The matter “deserves a much more thorough examination,” Nowotny said in a Bloomberg Television interview in Vienna on Wednesday. “We shouldn’t act in a too-active way.”
Slovenian central bank Governor Bostjan Jazbec seemed to agree during a conference in in the capital Ljubljana, saying it’s too early to talk about added stimulus.
While a euro-area Purchasing Managers’ Index for manufacturing and services slipped to 53.9 in September from 54.3 in August, the third-quarter average stood at the highest level in more than four years, according to a report published on Wednesday. New orders grew at the fastest rate in five months and a gauge for the amount of raw materials bought by manufacturers stood at a 19-month high, signaling increasing production in the coming months.