Euro at 13-Month High as Bulls See Opportunity in ECB Taper Talk
The euro rallied to the highest level in more than a year while a slump in German bunds deepened on speculation that the European Central Bank is edging closer to a decision to scale back monetary stimulus.
Europe’s common currency has strengthened against all but two of its major peers in the past week as President Mario Draghi said Tuesday that reflationary forces had replaced deflationary ones in the region. Yields on German 10-year bonds are headed for the biggest weekly increase since early March.
While the sharp currency and bond swings may have vexed ECB officials, prompting comments that markets had misinterpreted Draghi’s remarks, many analysts and investors remain convinced that this week marked a turning point in the outlook for euro-area monetary policy.
The shared currency rose 0.4 percent to $1.1425 as of 9:57 a.m. in London, taking its gains in the past five days to 2.4 percent.