The euro rose to a four-year high against the yen after a European Central Bank board member said policy makers must be “very careful” about using negative interest rates to counter low inflation.
The dollar touched a two-week low as Chicago Federal Reserve President Charles Evans said policy makers are waiting to see that the labor market “has improved substantially” before trimming the bond-buying program known as quantitative easing. Chairman Ben S. Bernanke speaks later. A gauge of global volatility fell to its lowest level this month. Economists forecast that a report tomorrow will show U.S. retail sales increased in October after dropping the previous month.
“There was suspicion the ECB might be on the verge of doing something aggressive, like QE and negative rates, but the commentaries from ECB we’ve had since than have been scaling back from it,” Geoffrey Yu, a senior foreign-exchange strategist at UBS AG in London, said in an interview. “Maybe there’s some correction to that.”
The euro rose 0.4% to 135.59 yen at 2:43 p.m. New York time after touching 135.71, the strongest since November 2009. The shared currency gained 0.2% to $1.3530 after reaching $1.3547, the strongest level since Nov. 6. The dollar rose 0.2% to 100.23.
The Bloomberg U.S. Dollar Index, which monitors the greenback against 10 major counterparts, was little changed at 1,015.49 after touching 1,013.11, the lowest since Nov. 6.
Norway’s krone rose versus all of its 16 of its most-traded counterparts after third-quarter gross domestic product increased 0.7%, exceeding the median economist forecast. The currency appreciated 0.4% to 8.2378 per euro after reaching 8.2070, the strongest level since Nov. 11. It gained 0.6% to 6.08887 per dollar.
The Czech koruna declined against all 31 of its major peers after Ceska Narodni Banka board member and rate-setter Lubomir Lizal said he can see the central bank intervening to weaken the currency to 28 koruna per euro. The koruna slipped 0.9% to 27.369 per euro after decreasing to 27.397, the weakest since April 2009.
Turkey’s lira gained versus most of its major counterparts after the country’s central bank said it terminated one-month repo auctions in order to contain the impact of exchange rate volatility on pricing behavior. The currency appreciated 0.5% to 2.0124 per dollar after rising to 2.0054, the lowest since Nov. 1.