Euro Falls Against Dollar

ECB’s Nowotny suggests officials should use more policy instruments to raise competitiveness

The Wall Street Journal

By IRA IOSEBASHVILI

Oct. 15, 2015 2:14 p.m. ET

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The euro fell against the dollar Thursday, after a member of the European Central Bank suggested officials should use more policy instruments to raise the region’s competitiveness.

The euro was recently down 0.7% at $1.1392, giving back most of the previous day’s gains. The Wall Street Journal Dollar Index, which gauges the buck against a basket of 16 currencies, was unchanged at 86.62.

Ewald Nowotny, a member of the ECB’s governing council, said the central bank is “clearly missing” its consumer price inflation target and recommended using “additional sets of instruments” to stoke growth.

Consumer prices in the eurozone fell annually in September by 0.1%, for the first time since the ECB launched its program of government-bond purchases in March, leading to suggestions that the central bank should step up the program, which has weighed on the euro.

“The comments reminded investors that there is an additional risk of monetary support for the European economy from the ECB,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange. “This should ultimately keep the upside for the euro limited.”

The dollar also received a boost from U.S. jobless claims data, which showed the number of Americans filing for first-time unemployment benefits falling last week to match the lowest level in more than 40 years. Investors are weighing the numbers against week of uneven data, which have raised doubts over whether the economy is strong enough for the Federal Reserve to raise rates in coming months.

Higher rates tend to strengthen the dollar, by making the currency more appealing to investors seeking yield.

Write to Ira Iosebashvili at ira.iosebashvili@wsj.com