Euro slips after Draghi remarks
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NEW YORK, Feb 7 AFP
February 08 2013, 10:32AM
The euro lost more than one cent against the dollar after the European Central Bank left rates unchanged and ECB chief Mario Draghi gave a middling picture of the eurozone economy.
At 2200 GMT on Thursday (0900 AEDT Friday) the euro was trading at $1.3395, its lowest level in two weeks, down from $1.3519.
"At first, it was Draghi's subdued tone that sent the euro-dollar lower but the selling gained momentum as the ECB president started to talk about the currency," said Kathy Lien of BK Asset Management.
In a press conference after the ECB rate decision, Draghi fended off pressure to adopt a policy to hold the euro down.
"The appreciation is in a sense a sign of return of confidence in the euro," Draghi argued.
However, Lien pointed out, he also stressed that exchange rates should reflect fundamentals and that if the euro kept climbing, it could be a challenge to price stability.
"While Draghi believes that the exchange rate is not a policy target, the amount of time he spent talking about inflation in his prepared commentary suggests that the euro rally is impacting their view on monetary policy," Lien said.
The yen was mixed, its steady drop of recent months on hold for the moment. The dollar edged up to 93.61 yen from 93.57; the euro was at 125.40 yen, down from 126.46.
The British pound gained to $1.5709 from $1.5658. The dollar rose to 0.9183 Swiss francs from 0.9101 francs.