ECONOMY

Euro touches 14-month low before Draghi testimony

The euro touched a 14-month low before European Central Bank President Mario Draghi speaks to European Union lawmakers. New Zealand’s dollar rose after Prime Minister John Key won a third term in a record election victory.

The euro held losses from last week versus most 16 major counterparts as continued tension between Russia and Ukraine even amid a truce agreement weighed on prospects for the European economy. New Zealand’s kiwi climbed against all but one of its 31 major peers. A gauge of the dollar was near the highest in four years before Federal Reserve Bank of New York William Dudley speaks at a Bloomberg summit.

“Anything Draghi says on the potential size of the balance sheet will be particularly important,” said Emma Lawson, a senior currency strategist at National Australia Bank Ltd. in Sydney. Continued uncertainty over Ukraine “weighs on the market’s consensus on European growth, in particular German growth, and will keep the euro subdued,” she said.

The euro added 0.1 percent to $1.2844 at 9:15 a.m. in Tokyo after falling to $1.2826, a level not seen since July 2013. It was at 139.90 yen from 139.89. The dollar traded at 108.91 yen after rising 1.6 percent last week to 109.04.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, was at 1,055.44 from 1,055.85 on Sept. 19, the highest close since June 2010.

ECB’s Draghi will testify to the European Parliament’s economic and monetary committee today in Brussels. Banks asked for just 83 billion euros ($107 billion) in the first allotment of the ECB’s targeted lending program last week, compared with the median estimate of 150 billion euros by analysts surveyed by Bloomberg News.

[Bloomberg]