Dollar extends gains as euro softens on expectations for ECB move
Investing.com - The dollar extended Thursday's gains into Friday as investors flocked to the greenback after European Central Bank President Mario Draghi hinted that monetary authorities would feel at ease implementing fresh stimulus measures in June.
In U.S. trading on Friday, EUR/USD was down 0.66% at 1.3748.
The European Central Bank this week left interest rates unchanged at 0.25%, though the euro dropped after ECB President Mario Draghi said the bank's governing council would be comfortable acting at its next meeting after the bank publishes fresh inflation and growth forecasts.
Draghi attributed weak inflation rates to food and energy prices, but added that the strong euro and weak domestic demand are also pushing down inflation.
He reiterated that the ECB does not have a target for the euro exchange rate but stressed that the bank would closely monitor exchange-rate developments.
Market talk that fresh easing measures or rate cuts softened the euro, which boosted the dollar's safe-haven appeal.
The ECB will meet on June 5 to discuss monetary policy.
Elsewhere on Friday, official data revealed that Germany's trade surplus narrowed to €14.8 billion in March from €15.8 billion in February, whose figure was revised from a previously estimated surplus of €15.7 billion. Analysts had expected the trade surplus to widen to €16.6 billion in March.
Meanwhile, pro-Russia separatists in eastern Ukraine ignored a public call by Russian President Vladimir Putin to postpone a referendum on self-rule and said they plan to go ahead on Sunday with a vote that some fear could lead to a civil war.
European Commission President Jose Manuel Barroso said earlier that the European Union was still struggling to agree on what approach to take on the crisis and added the event was the biggest threat to European security since the fall of the Berlin Wall.
The dollar was up against the yen, with USD/JPY up 0.12% at 101.78 and up against the Swiss franc, with USD/CHF up 0.79% at 0.8872.
The greenback was up against the pound, with GBP/USD down 0.54% at 1.6841.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.64% at 1.0900, AUD/USD down 0.20% at 0.9355 and NZD/USD down 0.36% at 0.8614.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.62% at 79.97.
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