The euro closed at almost an 11-year low as the European Central Bank prepares for a meeting at which policy makers are forecast to adopt a sovereign-bond purchase program under the quantitative-easing strategy.
The 19-nation shared currency pared gains against the dollar after Bloomberg reported that two central-bank officials said policy makers led by Mario Draghi will propose purchasing 50 billion euros ($58 billion) in assets per month through 2016. Canada’s dollar plunged the most in three years after the central bank unexpectedly cut interest rates, while the yen climbed as the Bank of Japan refrained from more stimulus. Brazil’s real rose before policy makers boosted borrowing costs.
“This market is very nervous,†Dean Popplewell, vice president of currency analysis and research at Oanda Corp., said by phone from Toronto. “The bullish expectation for Draghi to deliver is somewhat priced in. If the ECB wavers at all, these markets are going to severely punish the ECB.â€
