ECB's Draghi hints at early steps away from aggressive stimulus
The dollar fell broadly Tuesday, marking a two-week low against the euro, as investors continued to weigh what could be shifting sentiment away from aggressive stimulus at the European Central Bank.
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The ICE Dollar Index , a measure of the currency against a basket of six major rivals, was down 0.4% at 96.99.
Investors traded the dollar cautiously ahead of Federal Reserve Chairwoman Janet Yellen's speech in London on Tuesday, set for 1 p.m. Eastern U.S. time, and any commentary backing up or undermining what is expected to be at least one more interest-rate hike from the Fed this year.
Philadelphia Fed President Patrick Harker will also speak in London, while San Francisco's John Williams, who already signaled his preference for higher U.S. rates in a speech this week, will offer remarks in Australia. Data on home prices and consumer confidence (http://www.marketwatch.com/economy-politics/calendars/economic) will be released.
Monetary policy was also in focus for the shared currency. The euro jumped above $1.1250, its highest level in nearly two weeks.
The euro gained after European Central Bank President Mario Draghi said in a speech in Portugal that "a considerable degree" of stimulus is needed in the eurozone. It was still a slight step back from earlier speeches by some analysts' accounts.
"A constant policy stance will become more accommodative, and the central bank can accompany the recovery by adjusting the parameters of its policy instruments -- not in order to tighten the policy stance, but to keep it broadly unchanged," Draghi told an ECB conference in Sintra, Portugal, according to news coverage of the event.
The euro was changing hands at $1.1253, up 0.6% compared to $1.1182 late Monday in New York.
"This is no change in ECB rhetoric, which although it shifted to a less dovish bias at the latest policy meeting it remained committed to keeping rates at current low levels," said Charalambos Pissouros, senior analyst with Iron FX. "Thus, we keep our view untouched that the ECB is likely to continue to shift towards a more sanguine bias at its upcoming meetings, provided that incoming eurozone data remain solid."
In other currencies, the pound was worth $1.2742, up 0.2% compared to $1.2721 late Monday.
The pound has gained marginally to start the week after U.K. Prime Minister Theresa May reached a deal with Northern Ireland's Democratic Unionist Party for its lawmakers to support the Conservatives' minority government (http://www.marketwatch.com/story/uks-dup-reaches-deal-to-support-minority-tory-government-reports-2017-06-26).
"We see the likelihood for [pound-dollar] to trade higher heading into the Queen's Speech vote on Thursday and get closer to $1.2850, given that the Tory-DUP accord lifts some political uncertainty," said Pissouros. "If [pound-dollar] manages to break above the $1.2755 resistance soon, then we may see it targeting our next resistance of $1.2815."
Against its Japanese counterpart, the dollar bought Yen111.72, down 0.1% compared with Yen111.87 late Monday.
(END) Dow Jones Newswires
June 27, 2017 06:52 ET (10:52 GMT)