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Draghi comments send euro lower

Monday, February 18 16:45:12

The euro dipped against the dollar today as European Central Bank president Mario Draghi said the euro's appreciation added downside risks to inflation and reiterated there were risks to the euro zone economic outlook.

Its drop was limited, however, with traders still inclined to buy the currency on dips, especially against a broadly weaker yen. The Japanese currency resumed broad falls after Japan signalled it would push ahead with aggressive monetary easing, having escaped criticism from G20 countries at the weekend. But trading volumes were thin, with U.S. markets closed for President's Day.

The euro was down 0.1 percent at $1.3348, having dropped to around $1.3333 following Draghi's comments. It remained above chart support around $1.3310, the 38.2 percent retracement level of its Nov-Feb rally.

"Draghi's comments prompted a bit of a dip in the euro but that just provided better levels to buy the currency," said Jeremy Stretch, head of currency strategy at CIBC.