Mario Draghi’s pledge to safeguard the euro is proving a more powerful elixir for traders than the potential for lower interest rates as the region struggles to exit its second recession in four years.
The pound strengthened to a five- week high against the euro after the imposition of a levy on bank deposits in Cyprus threatened to throw Europe back into crisis, fueling demand for U.K. assets as a haven.
The European Central Bank is unlikely to accept any default-rated Greek bonds as collateral, and thus the French proposal to roll over Greek securities announced last week will probably be withdrawn, according to Commerzbank AG.
The euro rose against the dollar, extending a gain from last week, amid optimism Europe’s leaders meeting this week will signal support for Greece and outline fresh measures to combat the region’s debt crisis.
Ukraine’s hryvnia may slide at least 20 percent against the dollar as the International Monetary Fund pushes the country to accept greater exchange-rate flexibility and banks and businesses convert a backlog of the currency, according to Commerzbank AG.
The pound rose for the first time in three days against the dollar after an industry report showed the number of U.K. business insolvencies slid in September, boosting optimism the economic recovery is strengthening.