By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) --The dollar was lower against most major
currencies on Thursday, though the euro was pushing higher after
perceived dovish comments from European Central Bank President
Mario Draghi.
The euro (EURUSD) moved up to $1.3827 from $1.38180 late
Wednesday, also gaining after the German Ifo beat expectations. The
business-climate index rose to 111.2 points in April, up from 110.7
in March, against forecasts for a small decline.
The euro initially pared back some gains as comments from
Draghi's keynote speech from a conference in Amsterdam began
filtering out. In prepared comments, Draghi said any worsening of
the inflation outlook in the euro zone may lead to asset buying. He
also said the euro exchange rate is an "increasingly important
factor" in monetary policy and could trigger additional easing
measures.
But after that initial dip, the euro was climbing steadily back
up to where it was before Draghi began speaking.
"The comments from ECB President Draghi this morning reflect the
fact that the ECB has become far more open in discussing the policy
options available to them to tackle the threat of deflation," Simon
Smith, chief economist at FxPro, said in emailed comments. "He
talks of cutting rates, extending fixed-rate allotments and asset
backed purchases, but counteracts this by underling the potential
unintended consequences of such unconventional measures."
Against the yen (USDJPY), the dollar weakened further, dropping
to Yen102.37 from Yen102.53 late Wednesday. The British pound
(GBPUSD) inched up to $1.6796, from $1.6782.
No surprise from the Kiwis
The New Zealand dollar (NZDUSD) rose to 85.89 cents, from 85.80
U.S. cents late Wednesday, after the central bank raised interest
rates for the second straight month on Thursday by 25 basis points
to 3%. The Kiwi dollar has risen around 3% against a basket of
currencies so far this year, but Reserve Bank Governor Graeme
Wheeler said the bank doesn't see those gains as "sustainable."
The increase wasn't a surprise, matching rate-hike expectations
of 14 economists polled by The Wall Street Journal.
The Australian dollar (AUDUSD) eased to 92.80 U.S. cents, from
92.88 U.S. cents late Wednesday.
The ICE dollar index (DXY) , a gauge of the dollar's strength
against six rivals, fell to 79.812 versus 79.869 late Wednesday.
The WSJ Dollar Index , which measures the greenback against more
rivals, fell to 73.05 versus 73.11.
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