The euro plunged to an 11-year low as Mario Draghi rocked the market with a sovereign-bond buying program that exceeded forecasts.
The 19-nation currency fell versus 27 of its 31 major peers posted its biggest weekly drop in three years after the European Central Bank president outlined details of a $1.1 trillion euro ($1.23 trillion) stimulus plan. Denmark’s krone slid as that nation cut interest rates twice, while Canada’s dollar plunged on the first decrease in borrowing costs since 2009. A gauge of the greenback closed at the highest on record before the Federal Reserve is forecast to hold rates unchanged next week.
“The downside for the euro is substantial,” Jurgen Odenius, chief economist at Prudential Financial Inc.’s fixed-income division, said by phone from Newark, New Jersey, on Friday. “The channel through which Draghi’s hoping to achieve an increase in inflation is through a weaker euro.”
The euro dropped 3.1 percent to $1.1204 on Friday in New York, the biggest weekly loss since September 2011, and touched $1.1115, the least since September 2003. The currency was headed for a seventh monthly decline against the dollar.
The shared currency tumbled 2.9 percent to 131.95 yen, while Japan’s legal tender slid 0.2 percent to 117.77 per dollar.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, rose 1.9 percent to 1,161.31, the highest close in data going back to 2004.