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US dollar rises against euro on ECB official’s remarks

New York: The US dollar increased against euro on Friday as a European Central Bank’s (ECB) official signalled that the bank may unleash more stimulus plans in the future.

Erkki Liikanen, an ECB Governing Council member, said on Friday that the central bank had not run out of tools to boost the economy and would continue to support it until it reaches the inflation target of 2 percent, Xinhua reported.

The shared currency declined 0.17 percent against the greenback after Liikanen’s words.

In the previous session, the euro soared 1.8 percent against the greenback as the ECB President Mario Draghi suggested that years of interest rate cuts may finally come to an end.

“Rates will stay low, very low, for a long period of time and well past the horizon of our purchases,” Draghi said.

However, he said, “from today’s perspective and taking into account the support of our measures to growth and inflation, we don’t anticipate that it will be necessary to reduce rates further”.

Draghi’s remarks followed the ECB’s decision to cut the main refinancing operations interest rate for the euro area by 5 basis points to a record low of zero percent on Thursday.

The bank also expanded its asset purchase programme from 60 billion euros ($66.81 billion) to 80 billion euros ($89.08 billion) per month, beginning in April.

In late New York trading, the euro fell to $1.1155 from $1.1206 of the previous session, and the British pound climbed to $1.4378 from $1.4290. The Australian dollar went up to $0.7573 from $0.7450.

The dollar bought 113.73 Japanese yen, higher than 112.99 yen of the previous session. The dollar decreased to 0.9819 Swiss francs from 0.9821 Swiss francs, and it inched down to 1.3218 Canadian dollars from 1.3345 Canadian dollars.

–IANS

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