Investing.com - The euro rose to fresh three year highs against the dollar on Thursday after European Central Bank President Mario Draghi said the economy has accelerated more than expected and that inflation is expected to rise in the medium term.
EUR/USD hit highs of 1.2536, a level not seen since December 2014 and was at 1.2525 by 09:03 AM ET (14:03 GMT), up 0.95% for the day.
The euro was boosted after Draghi said inflation is expected to rise gradually over medium term and head back towards the bank’s 2% target. He noted that underlying inflation remains subdued.
Draghi also said recent exchange rate volatility is a source of uncertainty and needs to be monitored for its impact on short term price stability.
He reiterated that the ECB does not target exchange rates.
The ECB left interest rates unchanged and repeated that its bond buying program will run until September or beyond if necessary earlier Thursday.
The euro was also higher against the pound, with EUR/GBP advancing 0.22% to 0.8732.
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