The euro fell to two year lows against the dollar on Thursday after European Central Bank President Mario Draghi said it will soon start purchases of asset backed securities and indicated that further unconventional measures are on the way. EUR/USD fell to lows of 1.2398, the weakest level since August 2012, from around 1.2525 ahead of the announcement and was last down 0.50% to 1.2421. The drop in the euro came after Draghi said the ECB would start purchases of ABS in the near future. The program will run for two years, and have a “sizeable impact” on the ECB’s balance sheet Draghi said, moving it towards its 2012 levels. He confirmed that the ECB has already started purchasing covered bonds, one of the easing measures implemented in an effort to avert the threat of deflation in the euro area. He added that the governing council is unanimously committed to taking further “timely measures”, if needed. The governing council believes the measures will move inflation back towards its target of close to, but just under 2%, he said. The ECB voted to keep its headline interest rate on hold at record lows of 0.05% earlier Thursday. The bank also held the marginal lending rate at 0.3% and the deposit facility rate at minus 0.2%, in a widely anticipated decision. The euro also fell to session lows against the yen, with EUR/JPY down 0.42% to 142.54. The dollar received an additional boost after data showed that the number of people who filed for unemployment assistance in the U.S. last week fell by 10,000 to 278,000 from the previous week’s revised total of 288,000. The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was up 0.44% to fresh four-and-a-half year highs of 88.03. Demand for the greenback continued to be underpinned following gains by Republicans in the U.S. mid-term elections on Wednesday and a strong private sector jobs report which boosted the outlook for Friday’s U.S. nonfarm payrolls report.