The euro dropped the most in 12 weeks against the yen as European Central Bank President Mario Draghi said policy makers would broaden asset purchases if the inflation outlook for the region slowed.
Among the shared currency’s 16 major peers, only Switzerland’s franc fell, dropping amid speculation the nation’s central bank is intervening to defend a 1.20-per-euro cap. The yen strengthened, paring a fifth straight weekly drop, after Japan’s Finance Minister Taro Aso said the currency had depreciated too rapidly. Australia and New Zealand’s dollars climbed after China cut interest rates for the first time since 2012.
“The ECB is going to be delivering something more substantial at its meeting in December and his comments have been very much in line in confirming our view,” said Michael Sneyd, a currency strategist at BNP Paribas SA in London. “People haven’t got as much of this trade on as they really want, which is why we’ve been seeing such a big reaction in the price to his comments.”
The euro weakened 1.3 percent to 146.32 yen at 10:17 a.m. New York time, reaching the steepest decline since Aug. 27. The shared currency dropped 0.9 percent to $1.2427. The yen advanced 0.4 percent to 117.75 per dollar, halting a six-day drop.
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