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[TOKYO] The euro fell to its lowest since March after Mario Draghi signalled Thursday quantitative easing won't come to an "abrupt" end.
The single currency headed for a third weekly loss after the European Central Bank president said neither tapering nor an extension of bond-buying stimulus was discussed at a monetary meeting that ended that day. That leaves traders waiting until at least December for news about policy changes.
Only the Canadian dollar has fallen more this week among major currencies.
"It's a double-whammy from the ECB meeting," said Matt Simpson, a senior market analyst at ThinkMarkets in Singapore. "Draghi didn't talk tapering and suggested easing in December. That's got traders pricing in a weaker euro."
The euro dropped 0.2 per cent to US$1.0904 as of 1:37pm in Tokyo, after falling to as low as US$1.0896, the weakest level since March 10. It has fallen 0.6 per cent this week. ThinkMarkets's Mr Simpson predicts a drop toward US$1.0830.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, added 0.1 per cent. Futures traders are pricing about a 68 per cent probability that the US central bank will raise interest rates by December, up from 66 per cent at the end of last week.
The measure has been little changed since Oct 14, halting a two-week advance. Earlier this month, the gauge touched the highest level since mid-March, amid speculation the Fed was getting closer to raising interest rates.
Australia & New Zealand Banking Group Ltd predicts the euro can drop below US$1.05 in the coming months amid an outlook for higher US rates and political risks from an Italian referendum and elections in Netherlands, France and Germany, Brian Martin, its head of global economics, wrote in a note.
"We also have a slightly firmer dollar on our hands, and I suspect the drop in the euro-dollar rate is as much to do with that as anything else," said Ray Attrill, global co-head of foreign-exchange strategy at National Australia Bank Ltd in Sydney.
A break below US$1.09 "would open up a potential move to the February and March lows in the low US$1.08s."