The euro fell for a fourth week, its longest streak of losses since September, as declining consumer prices backed the case for further monetary stimulus from the European Central Bank (ECB).
The US dollar pared a fourth week of gains as traders weighed a US jobs report showing wages declined last month. Speculators boosted wagers on the US dollar versus eight of its major peers to a record high before the US releases consumer price data on Jan. 16.
The euro touched a nine-year low versus the greenback and slid to its weakest since October against the yen as an official said ECB policymakers met to discuss government-bond purchases under the quantitative-easing (QE) strategy. Russia’s ruble tumbled as oil fell below US$50 a barrel.
“The expectations of QE have been building and were reinforced by the comments this week and the CPI data,” said Vassili Serebriakov, a New York-based foreign-exchange strategist at BNP Paribas SA. “We might not get a much weaker euro immediately after the announcement, but, overall, if QE continues, the euro should be a key funding currency and will weaken over time.”
The 19-nation shared currency declined 1.3 percent to US$1.1842 this week in New York, after reaching US$1.1754 on Thursday.
The euro slipped a second week against the yen, losing 3 percent to ￥140.32 and touching ￥140.19. The Japanese currency rose for the first time in four weeks versus the US dollar, adding 1.7 percent to ￥118.50.
The Bloomberg Dollar Spot Index, which tracks the US currency against 10 major peers, was little changed for the week at 1,141.13. It closed at 1,147.54 on Thursday, the highest in data going back to 2004.
Brazil’s real rose the most of the US dollar’s 31 major peers this week, after a four-day streak of gains. The currency rose 2.3 percent, the most since November.
The ruble led currencies lower, sliding 5.3 percent, as the oil selloff continued. Brent crude, the benchmark for more than half of the world’s oil, declined to US$48.90 a barrel on Thursday, the least since April 2009.
The Czech Republic’s koruna fell the most in 14 months as growing deflation risk fueled speculation the nation’s central bank will try to weaken the currency. It dropped 3 percent.
The pound dropped to its weakest level in 17 months against the US dollar as economic data added weight to speculation that the UK recovery is too frail for the Bank of England to raise interest rates this year.
Sterling, in its fourth week losing ground versus the US currency, depreciated against most of its 16 major peers in the past five days as reports showed manufacturing and services growth slowed last month and construction output rose less than economists forecast.
Central bank policymakers meeting in London kept the benchmark rate at a record-low 0.5 percent on Thursday. UK government bonds advanced, pushing the 30-year yield to a record low.
The pound fell 1.1 percent in the week to US$1.5155 at 5:18pm in London on Friday, having reached US$1.5035 on Thursday, the weakest level since July 2013. Sterling rose 0.3 percent to ￡0.7811 per euro.
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