The euro fell to a nine-year low against the dollar on Monday as bets mounted on a further decline for the currency, faced with the possibility of more monetary easing by the European Central Bank and its diminishing status as a reserve currency. The euro was already battered after ECB President Mario Draghi late last week underscored the divergence between European and U.S. monetary policy, set to remain a key theme in 2015. The common currency fell to $1.1860, its lowest since March 2006. Draghi told the German financial newspaper Handelsblatt that the ECB was less likely to preserve price stability than it was six months ago, suggesting it was ready to take bolder steps on monetary stimulus early this year to shore up the economy and ward off deflation. Boosted by its gains against the euro, the dollar climbed to a fresh nine-year peak against a basket of key currencies. The dollar index touched 91.456, its highest since December 2005. The dollar dipped 0.2 percent to 120.280 yen after gaining nearly 0.6 percent on Friday. Sterling, hit Friday after weak U.K. manufacturing further diminished prospects of Bank of England hiking rates in 2015, fell to a fresh 17-month low in wake of the dollar’s overall gains. The pound fell as low s $1.5185 before pulling back to $1.5302. Brent crude futures traded at $55.86 per barrel in early Monday trade, just above Friday’s low of $55.48. That did not help commodity currencies such as the Canadian dollar, which fell to C$1.1840 to the U.S. currency, its lowest level since mid-2009. The Australian dollar likewise dropped to a 5-1/2-year low of $0.8053.
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