The euro fell below $1.32 for the first time in nearly a year Monday following Mario Draghi’s unexpected suggestion on Friday that more stimulus could be on the way for the euro zone.
The euro gapped lower against the dollar EURUSD, -0.01% during Asia’s trading session, but then held steady after the German Ifo survey reading showed business confidence declined more than expected in August.
The euro traded at $1.3195, down from $1.3242 late Friday in New York.
The euro could see a temporary recovery “as technical traders line up their bids ahead of the 2013 lows” of $1.3150 before continuing its decline, according to a research note from Boris Schlossberg, managing director of FX strategy at BK Asset Management.
The U.S. dollar has continued to rise against the euro, yen and Canadian dollar in August despite U.S. interest rates trending lower. If this phenomenon persists for another week, it will mark only the fourth month since the 2008 collapse of Lehman Brothers that the dollar has risen while interest rates have fallen, according to David Woo, head of global rates and currencies research at Bank of America Merrill Lynch.
U.K. markets are closed Monday for a holiday, which will add to the usual end-of-summer light trading volume.
The euro EURJPY, -0.16% traded at 137.20 yen Monday, down from ¥137.67 Friday.
The dollar USDJPY, -0.15% was trading flat at ¥103.98 Monday.
The pound GBPUSD, -0.04% traded at $1.6583, up from $1.6572 late Friday.
The WSJ Dollar Index BUXX, -0.03% a measure of the dollar against a basket of major currencies, was up 0.13% at 74.63.