The euro slumped to the lowest in 4 1/2 years against the U.S. dollar after the European Central Bank signaled it will embark on large-scale government-bond purchases as the Federal Reserve moves closer to raising interest rates.

The 19-nation common currency slid for a third week after ECB President Mario Draghi said he can’t rule out deflation in the euro area. The yen also declined for a third week. The ruble plummeted 9.4 percent to lead emerging-market peers lower. The dollar advanced gained against all of its 16 major peers before a report next week that may show the jobless rate fell to a 6 1/2-year low.

“The U.S. labor market is performing well and the unemployment rate is falling further,” Ralf Umlauf, head of research for Helaba Landesbank Hessen-Thueringen in Frankfurt, said by phone yesterday. “In the euro zone, it’s a completely different picture. We have still very high unemployment rates near the historical top. So that’s the reason why we have the divergence in monetary policies.”

The euro dropped 1.5 percent last week to $1.2002 yesterday in New York after falling to $1.2001, the lowest since June 2010. The shared currency lost 1.3 percent against the yen to 144.63. Japan’s currency traded at 120.28 per dollar.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, rose 0.9 percent in the week to 1,141.02. It increased 11 percent last year, the biggest gain in data going back to 2005.