Mario Draghi, the president of the European Central Bank, may be pushing hard for a weaker euro to spur growth in Europe, but his central bank peers seem to be several steps ahead of him.
In an interview with a German newspaper on Friday, Mr. Draghi, known for using his public comments to achieve policy goals, said the threat of deflation might force his bank to take more aggressive stimulus measures, which could include buying eurozone bonds in bulk.
His comments prompted the euro to fall to $1.20, a four-and-a-half year low against the dollar. More important, it also highlighted a powerful new trend in world currency markets: Global central banks — along with investors also wary of the low returns that their euros have been delivering — have increasingly been switching into dollars and out of euros.
On Friday, the dollar also hit a multiyear high against the Japanese yen, and it was also gaining on the fragile currencies in Brazil, Turkey and Russia.
The expectation is that a rapidly recovering United States economy will push the Federal Reserve to increase interest rates this year, making dollar-based assets more attractive than those denominated in euros, Japanese yen and emerging market currencies.
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