The euro fell further against the sterling nearing the 1.15 level for the first time in seven months as the British pound’s rally against the dollar this week spread to other currencies.
Sterling strengthened, its highest since June 2017, taking its gains to more than 2 percent against the single currency this month.
Its gains against the dollar have been more pronounced, with sterling rising more than 5.6 percent this month, on track for its best monthly performance since June 2009.
The dollar skidded to a three-year low against its peers today after caving on comments by U.S. Treasury secretary Steven Mnuchin that he welcomed a weaker currency, while the euro was firm ahead of the European Central Bank’s policy decision.
The dollar slumped after Mnuchin told the World Economic Forum in Davos on Wednesday that “obviously a weaker dollar is good for us as it relates to trade and opportunities.” His comments were seen by markets as a departure from traditional U.S. currency policy.
The immediate focus was on the ECB’s policy setting meeting later in the global day as markets look for any signs that the central bank is worried about the rapidly appreciating euro.
The euro zone economy may be roaring ahead though the expectation is that a rapidly strengthening euro may see ECB President Mario Draghi pour cold water on the view the bank is speeding towards an interest rate hike.
This news could see the euro weaken further after the meeting.