The dollar dropped to the lowest level in more than five months against a basket of peers as the threat of more stimulus from the European Central Bank dissipated and U.K. industrial output exceeded forecasts.
The euro gained against 12 of its 16 major counterparts as European Central Bank policy makers signaled deflation risks are contained, subduing speculation of a round of bond-buying to boost prices and economic growth.
The euro fell versus the dollar as the European Central Bank signaled it’s monitoring gains in the currency for deflation risks. The yen rose on demand for a haven amid turmoil in Ukraine and pessimism about China’s economy.
The euro rose to the highest level this year against the dollar as inflation in the currency bloc exceeded analysts’ estimates, damping speculation the European Central Bank will add to monetary stimulus next week.
A gauge of major currency volatility fell to the lowest level in more than two weeks before Federal Reserve Chairman Janet Yellen gives her first monetary-policy report to Congress tomorrow as the central bank weighs the pace of the economy and additional cuts to its monthly bond-buying.
The dollar dropped against all but one peer after U.S. employers added the fewest jobs in two years in December, reducing speculation the Federal Reserve will wind down the bond-buying it uses to support economic growth.