Investing.com – The euro-dollar was down for a 10th consecutive session on Friday as European Central Bank (ECB) president Mario Draghi promised to maintain stimulus until it was clear that euro zone inflation was self-sustainable and while Federal Reserve (Fed) chair Janet Yellen’s revelation that the members of the American central bank generally agreed at the November 2 policy meeting that a rate hike in the U.S. would be appropriate “relatively soon” strengthened the greenback.
Draghi said on Friday that the ECB would base the decision on the withdrawal of stimulus on its analysis of whether the recovery in inflation can sustain itself.
"Going forward, our assessment will depend on whether we see a sustained adjustment in the path of inflation towards that objective," Draghi told the European Banking Conference in Frankfurt.
"And that means that inflation convergence towards 2% is durable, even with a reduction in monetary accommodation. Inflation dynamics, in other words, need to be self-sustained," he explained.
By 4:53AM ET (9:53GMT), EUR/USD was last down 0.22% at 1.0600, after hitting an intraday low of 1.0582.
This was its 10th consecutive session of losses, its longest stretch since its creation in 1999.
Even before Draghi’s speech, the currency pair was under pressure due to the strength of the dollar after Yellen paved the way for the Fed to hike interest rates in December.
In her testimony to the U.S. Congress Joint Economic Committee on Thursday, Yellen warned of the danger of waiting too long to tighten monetary policy.
Yellen referenced the November 2 Fed meeting and stated that policymakers judged back then that an increase in rates could “become appropriate relatively soon if incoming data provide some further evidence of continued progress toward the Committee's objectives.”
“Were the FOMC to delay increases in the federal funds rate for too long, it could end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of the Committee's longer-run policy goals,” she warned.
The greenback hit fresh 14-year highs against a basket of other currencies Friday, marking an intraday high of 101.44. That was its highest level since April 2003.
At 4:54AM ET (9:54GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.26% at 101.26.