The euro jumped to an eight-month high against the U.S. dollar after European Central Bank President Mario Draghi declined to express concerns about the euro's recent strength.
On Wednesday, the ECB held interest rates steady at a record low 0.5%, as Mr. Draghi noted that the euro zone's recovery was still weak and inconsistent. However, when asked whether the euro was too strong, Mr. Draghi responded that "the exchange rate is not a policy target." He also did not indicate that the ECB would give more cheap loans to banks in the near future.
The euro rose sharply after Mr. Draghi's news conference, as investors took his comments as a sign that the ECB would hold off on injecting any fresh stimulus into the region's economy. Additional stimulus would weigh on the euro's value.
"Draghi gave the impression that any further action wasn't right around the corner, so that helped the euro," said Joe Manimbo, senior market analyst at Western Union WU -0.05% Business Solutions in Washington, D.C. "Investors thought maybe the ECB was closer to pulling the trigger on easier monetary policy, but that wasn't the takeaway from Draghi's comments."
The euro rose as high as $1.3608, its strongest level against the dollar since Feb. 4. By late afternoon, the common currency bought $1.3582, up from $1.3526 late Tuesday.
The euro's strength has complicated the region's economic recovery. While improving euro-zone data have helped the common currency rise 3.1% against the dollar in the past month, a stronger euro makes European exports less attractive to overseas buyers. It also hurts exporters' revenue when they convert foreign earnings back to euros.
The dollar's weakness has contributed to the euro's rebound. U.S. data on Wednesday showed the private sector added 166,000 jobs in September, fewer than the 178,000 economists had expected. The disappointing data come two days before the release of the highly anticipated monthly jobs report, although the partial shutdown of the U.S. government may delay the release.
The dollar fell to a one-month low against the yen of ¥97.40, down from ¥98 late Tuesday. The U.K. pound rose to $1.6218 from $1.6197. Against the Swiss franc, the dollar dropped to CHF0.9028 from CHF0.9055.
The WSJ Dollar Index, which measures the dollar against a basket of currencies, fell to a seven-month low of 72.354 from 72.685 late Tuesday.
