The euro hit a three-week low on Thursday after the head of the European Central Bank said he saw no need to deviate from the ECB's policy path, which includes record-low interest rates and bond-buying until at least the end of the year.

The single currency had jumped above $1.09 in March for the first time since early November, after ECB chief Mario Draghi signaled a diminishing urgency for expansionary policy, with investors moving to price in a chance of an interest rate hike in early 2018.

But ECB policymakers have since indicated that markets moved too far in pricing in policy tightening.

Draghi continued in that vein on Thursday, saying that before altering its policy stance, the ECB must have sufficient confidence that inflation would return to target over a medium-term horizon, even when the central bank's expansionary policy was scaled back.

The euro, which had been trading slightly up on the day, fell after Draghi's comments, hitting a three-week low of $1.0629, leaving it down 0.2% on the day.

The dollar benefited from the euro's weakness, edging up 0.1% against a basket of major currencies.

It had risen to a three-week high of 100.850 overnight on an upbeat ADP report on U.S. private-sector employment.

But the currency fell from the three-week high despite hawkish-sounding minutes from the latest U.S. Federal Reserve meeting, which showed most policymakers think the Fed should begin trimming its $4.5 trillion balance sheet later this year and was on track for two more interest rate hikes in 2017 .

Against the yen the dollar traded down 0.2% to 110.53 yen, staying weak against the safe-haven Japanese currency because of caution over an impending U.S.-China summit and wider geopolitical concerns.

Regional tensions have risen after North Korea test-fired a ballistic missile on Wednesday, just a day before a summit between U.S. President Donald Trump and Chinese President Xi Jinping, where North Korea's arms development drive will take center stage. (Reuters)

Source: www.businessworld.ie