Euro plunges to its lowest in more than two years

149964186SG004_Spain_Strugg
Sean Gallup | Getty Images

The euro fell below $1.24 for first time since August 2012 on Thursday.

The euro plunged to its lowest in more than two years against the dollar on Thursday after European Central Bank President Mario Draghi affirmed his pledge to use unconventional measures to stimulate a sluggish euro zone economy.

He added that the impact of the ECB's asset-buying program on its balance sheet would be sizable. His remarks, which came after the ECB kept interest rates at a record low of 0.05 percent, were a green light for investors to sell the euro.

Symbol
Price
 
Change
%Change
=USD
---
EUR/USD
---
AUD/USD
---
JPY/USD
---
CHFUSD
---
GBP/USD
---

Net euro short positions last week were the largest since July 2012.

In a press briefing, Draghi said ECB members are all prepared to take more policy action if necessary and the bank's staff will prepare the groundwork. He reiterated that the risks to the euro zone's recovery remained tilted to the downside.

Disappointing surveys of euro zone business growth, as well as the Bank of Japan's surprise decision last week to expand its already massive stimulus program, have put pressure on the ECB to ease more in the euro zone, where deflation looms and growth is faltering.

In mid-morning trading, the euro was down 0.4 percent at $1.2437, hitting a 26-month low of $1.2398. Against the yen, the euro dropped from 10-month highs to trade down 0.5 percent at 142.45 yen

The dollar touched a seven-year peak against the yen of 115.49 yen and was last flat on the day at 114.53 yen.

The dollar earlier rose after data showed U.S. weekly initial jobless claims fell more than expected to 278,000 last week, compared with forecasts of 285,000.

The dollar index was up 0.2 percent at 87.661, having hit a high of 87.913, its highest since June 2010.

—By Reuters

More on foreign exchange.