The euro advanced versus most major peers after ECB Executive Board member Joerg Asmussen said policy makers haven’t exhausted their options to counter low inflation, according to an interview broadcast on Austria’s ORF radio.
“While I’d be very careful with such an instrument” as negative interest rates, he said, “I don’t want to fundamentally exclude it.”
The euro has strengthened 0.6% in the past month, according to Bloomberg Correlation-Weighted Indexes that track 10 developed-nation currencies. The dollar has climbed 1.9% and the yen is down 0.9%.
The ZEW Center for European Economic Research said its index of German investor and analyst expectations, which aims to predict economic developments six months in advance, rose to 54.6 in November, from 52.8 the previous month. That’s the highest since October 2009 and above the 54.0 median estimate of economists in a Bloomberg News survey.
The greenback fell a second day against most major currencies as Evans echoed comments by New York Fed President William C. Dudley yesterday that he’s more hopeful about the U.S. economy while indicating no change in the central bank’s bond-buying program.
At a Nov. 14 congressional hearing on her nomination to run the Fed, Vice Chairman Janet Yellen indicated she’ll press on with the central bank’s monetary stimulus until she sees a robust recovery, downplaying risks the policy is inflating asset bubbles. Bernanke will speak at the National Economists Club in Washington at 7 p.m.
“Comments from Dudley suggest the Fed is unlikely to begin tapering in December and that’s taken some of the bid away from the dollar,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “We stick to the view that the first taper will come in March.”
The U.S. central bank buys $85 billion of Treasuries and mortgage-backed securities each month to put downward pressure on borrowing costs. Officials will pare the purchases to $70 billion a month at their March 18-19 meeting, according to the median economist estimate in a Bloomberg survey on Nov. 8.