On Monday, the United States dollar rose against the euro after it was signaled by the European Central Bank President Mario Draghi that the bank could ease monetary policy further, while strong U.S. retail sales data also boosted the dollar against the yen.
Draghi said in Washington that “a further strengthening of the exchange rate would require further stimulus.” Bank of France Chief Christian Noyer remarked, “The stronger the euro is, the more accommodative policy is needed.”
“A number of ECB officials are talking in more detail about unorthodox policies,” said Alan Ruskin, global head of G10 currency strategy at Deutsche Bank in New York. “All of that is raising expectations that we’re not that far from action.”
The statements marked the strongest signal provided by ECB yet that it could act for heading off further gains in the single currency. The single currency retreated around half a percent from close to 2014 highs against the U.S. dollar, but was still up from its low for the year of $1.3476, which it touched on February 3.
The dollar hit session highs against the euro, Japanese yen, and Swiss franc after the Commerce Department said retail sales increased 1.1 percent in March. The euro was last down 0.48 percent against the dollar at $1.3817. The U.S. dollar index .DXY, which measures the dollar against six major currencies, was last up 0.36 percent.
Bennenbroek of Wells Fargo said, “The longer the situation remains unsettled, the greater the chance that there could be some further sanctions that could impact the economy.” The potential of the United States and European Union to impose further sanctions against Russia has weighed on the ruble, he added.