EUR/USD approaches two-year lows on Draghi comments

The euro approached two-year lows against the dollar in forex trading today (November 24th), dipping as dovish comments from European Central Bank president Mario Draghi heightened expectations for new stimulus measures in the eurozone.

EUR/USD was at 1.2396 as of 07:39 GMT, having touched lows of 1.2363 earlier in the session - not far from the 24-month trough plumbed on November 7th.

Speaking at the Frankfurt European Banking Congress on Friday, Mr Draghi boosted hopes for a fresh round of stimulus in the eurozone, describing its interest rate - which dipped to 0.4 per cent in October - as "excessively low".

The central bank, which has set a target rate of close to two per cent, will "do what we must to raise inflation and inflation expectations as fast as possible", he continued.

"If on its current trajectory our policy is not effective enough to achieve this, or further risks to the inflation outlook materialise, we would step up the pressure and broaden even more the channels through which we intervene, by altering accordingly the size, pace and composition of our purchases."

Elsewhere on the currency markets, the euro posted modest gains against the yen, edging up 0.11 per cent to 117.90 - just below last Thursday's seven-year peak of 118.96.

A range of factors have contributed to a dampening of the yen in recent weeks, notably the Bank of Japan's decision to increase its own stimulus measures at the end of October, as well as the postponement of a sales tax hike after it emerged the country slipped into recession in the third quarter.

The US currency, conversely, has enjoyed a significant rally through November on the back of news that the Federal Reserve has now exited the third round of its quantitative easing programme, heightening expectations for an interest rate hike next year.