April 26, 2018 / 1:17 PM / 25 days ago

Euro rallies to day highs as Draghi shrugs aside slowdown, bond yields fall

LONDON, April 26 (Reuters) - The euro rebounded to the day’s highs on Thursday after ECB President Mario Draghi presented a relatively confident outlook of the eurozone economy, contrary to some expectations that he would take a more cautious stance after recent weak data.

But the currency’s gains were largely marginal with core European bond yields dipping after Draghi acknowledged that measures of underlying inflation remained subdued.

After briefly falling to its lowest since mid-January at $1.2145 after the ECB’s decision to keep policy unchanged, the single currency rebounded and was trading 0.3 percent up at the day’s highs of $1.2210 after Draghi played down concern over recent softness in data.

Euro zone government bond yields dipped after Draghi said there had been an “unexpected decline” in some economic indicators, with Germany’s 10-year bond yield down 3 basis points on the day at 0.607 percent.

Euro zone stocks gave back some of their earlier gains, to trade up 0.4 percent as the euro gained. Euro zone banks gave back all their earlier gains to trade flat. (Reporting by the London Markets Team; Editing by Dhara Ranasinghe)

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