Reuters logo
FOREX-Euro gets lift from Draghi, US Senate vote delay dents dollar
June 28, 2017 / 1:32 AM / 5 months ago

FOREX-Euro gets lift from Draghi, US Senate vote delay dents dollar

* Euro near 10-month highs after Draghi’s upbeat comments

* Draghi opens door to policy tweak as economy recovers

* Vote on U.S. healthcare legislation delayed

* Dollar index nurses losses after Tuesday’s slide

By Masayuki Kitano

SINGAPORE, June 28 (Reuters) - The euro stood tall near a 10-month high on Wednesday after the European Central Bank chief hinted the days of the ECB’s aggressive stimulus are numbered, and as the dollar was pressured after a vote on U.S. healthcare legislation was delayed.

The euro was fetching $1.1338, after surging 1.4 percent on Tuesday and scaling a high of around $1.1349, its strongest level since late August 2016.

That rally came after ECB President Mario Draghi said at a conference in Portugal on Tuesday that deflationary forces had been replaced by reflationary ones.

But any change in the ECB’s stance should be gradual as “considerable” monetary support is still needed and the rebound in inflation will also depend on favourable global financing conditions, he added.

Traders said the euro could add to its gains in the near term.

“With the hawkish tone of Draghi, we should see European rates moving higher, especially on the 10-year part of the curve, and the euro I think has more room to move higher,” said Tareck Horchani, head of sales trading Asia-Pacific for Saxo Bank Group in Singapore.

The euro now faces resistance at $1.14, and could get a further boost if that level is breached, Horchani said.

Against the yen, the euro rose to 127.47 yen on Tuesday, its strongest level since April 2016. It was last at 127.18 yen.

The dollar nursed its losses, having come under pressure overnight after U.S. Senate Majority Leader Mitch McConnell delayed a vote on healthcare legislation, hoping to get more support from Republican senators.

Market participants are concerned that the Trump administration will find it hard to follow through with tax cuts and fiscal stimulus steps, without first getting the healthcare bill passed.

The dollar index, which measures the greenback against a basket of six major currencies, was little changed at 96.443 , after shedding about 1 percent on Tuesday.

Against the yen, the dollar eased 0.1 percent to 112.18 yen . (Reporting by Masayuki Kitano in SINGAPORE; Editing by Shri Navaratnam)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below