The euro rallied for a fifth week as European Central Bank President Maro Draghi said he expects inflation in the currency bloc to gradually rise, damping bets that policy makers would reduce the benchmark interest rate.
Regulatory investigations of alleged currency-market collusion are probably contributing to a slump in volatility in major foreign-exchange markets, according to Steven Barrow, Standard Bank Plc’s head of Group-of-10 research.
The euro had its biggest monthly gain since April as higher-than-projected inflation spurred speculation the European Central Bank will refrain from additional monetary stimulus at a meeting next week.
Federal Reserve Bank of Philadelphia President Charles Plosser, who votes on policy this year, said the Fed should press on with plans to trim its bond purchases with the economy likely to grow about 3 percent this year.
U.S. stocks climbed, with the Standard & Poor’s 500 Index rising to a record, as Federal Reserve Chair Janet Yellen said the central bank may alter its strategy on stimulus cuts should the economy weaken. The yen gained on worsening Ukraine tensions while sugar surged.
Canadian stocks rose, with the benchmark index near a three-year high, as banks rallied on better-than-forecast earnings and U.S. Federal Reserve Chair Janet Yellen said stimulus cuts could slow if growth weakens.
UBS AG, trying to reprise its success in limiting fines in a probe of interest-rate rigging, is seeking immunity in the U.S. and European Union as part of the global investigation of currency markets, two people with knowledge of the case said.
The difference between yields on two- and 10-year Treasuries narrowed for the first time in three weeks as investors questioned the pace of the economic expansion after reports showed harsh weather weighed on U.S. growth.