The dollar weakened further Thursday as the euro climbed to above $1.25 for the first time in more than three years.
Around 1400 GMT, the European single currency jumped to $1.2537, the highest level since mid-December 2014, after US Treasury Secretary Steven Mnuchin claimed a weaker dollar was “good” for the world’s top economy and as the eurozone economy picks up speed.
Mnuchin said in Davos that a weaker dollar boosted US trade opportunities, heaping pressure on the greenback.
But European Central Bank chief Mario Draghi on Thursday voiced concern over the “volatility” in the currency markets, saying it “represents a source of uncertainty which requires monitoring”.
He spoke after the European Central Bank left its massive financial stimulus for the eurozone economy in place Thursday, opting not to rock the boat after Mnuchin’s comments.
The ECB left eurozone interest rates at historic lows and held fast to plans to buy 30 billion euros ($37.2 billion) of government and corporate bonds per month until September, offering no hints about when it might step back from the mammoth programme.
Central bankers’ caution may have been prompted by remarks from Mnuchin, who declared Wednesday that “a weaker dollar is good for us” — already helping send the euro to a three-year high prior to Thursday’s new peak.
Mnuchin meanwhile said Thursday that he had no particular worry about the dollar’s value “in the short term”.