The euro jetted past $1.14 to its highest in just under 14 months on Thursday, with attempts by European Central Bank sources to moderate the message taken from a speech by President Mario Draghi this week falling largely on deaf ears. Three days of the biggest gains in more than a year for the single currency have pushed the broader dollar index to its lowest since October and prompted some of the market's biggest dollar supporters to call the currency's rally over.
Draghi's speech on Tuesday - coming amid a raft of hawkish signals from other major global central banks - convinced markets the ECB was preparing to start withdrawing its own emergency stimulus for the euro zone economy later this year.
After a long run lower, that has put the euro back in relatively uncharted territory, some analysts argue there is little technical resistance beneath $1.20. The currency steadied around $1.14 as US traders arrived at their desks on Thursday. "The biggest test will be 1.1500," said RBC's head of global FX strategy Elsa Lignos.
"Though month-end USD selling may reinforce the bearish USD sentiment in the next few days, we still think EUR's rally is more likely to run out of steam at 1.15." The euro was also half a percent higher against the yen at 128.435 yen. A third of a percent gain for the dollar against the yen also pointed to a slightly more robust performance for the dollar as the European morning wore on.
"The July 4 holiday is on Tuesday, so a lot of the US community will take the Monday off," said Richard Benson, co-head of portfolio investment with currency fund Millennium Global in London. "That means we are entering the quarter-end already today." "It may be a bit illiquid and a bit messier from here."
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