Forex – Euro hits 1-year highs after Draghi, dollar at multi-month lows-SapForex24

The euro rose to one-year highs against the dollar on Wednesday, while the dollar hit multi-month lows against a currency basket as investors digested comments from Federal Reserve officials and developments in Washington.

EUR/USD hit highs of 1.1379, the most since June 24 2016 and was at 1.1371 by 07.30 GMT (03.30 ET), up 0.3% for the day.

The pair rallied 1.39% on Tuesday, its biggest one-day percentage gain since last June after upbeat comments from European Central Bank President Mario Draghi fueled speculation that the central bank could soon unwind its quantitative easing program.

Draghi said factors weighing on inflation in the euro area were mainly temporary, adding that the bank could look through them.

          Forex Market News Update-SapForex24

He also said the ECB’s stimulus will be gradually withdrawn as the euro zone economy improves.

The common currency was at 14-month highs against the yen, with EUR/JPY touching overnight highs of 127.84. It was last at 127.62.

The euro hit the highest levels since November against the pound, with EUR/GBP hitting overnight highs of 0.8880.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.22% to 95.98 after falling almost 1% on Tuesday.

The dollar remained on the back foot after Senate Republican leaders postponed a vote on a sweeping healthcare reform until after Congress’ July 4 recess, in order to get more time to gather support for the bill.

The delay rekindled concerns over the Trump administration’s ability to push through tax cuts and fiscal stimulus plans, without first getting the healthcare bill passed.

Investors were also digesting remarks by Fed Chair Janet Yellen, who reiterated Tuesday that the U.S. central bank would continue to gradually raise interest rates.

Markets have been closely watching speeches from Fed officials after the bank stuck to its projection for one more rate hike this year at its meeting earlier this month despite the subdued inflation outlook.

Recent weakness in economic data has raised questions over the Fed’s plans to tighten monetary policy, with investors now expecting that the pace of its tightening could be much slower than policymakers want.

Against the yen, the dollar was little changed, with USD/JPY at 112.35.

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