Euro hits 2 1/2-year high close to $1.20


The euro flexed its muscle against the dollar and other major currencies again on Monday, pushing closer to $1.20 as it traded at a 2 1/2-year high after the European Central Bank’s Mario Draghi held back last week from talking down the shared currency.
Trading was thin, however, as a public holiday in global foreign exchange capital London quieted dealings and kept most European trading pairs confined to narrow ranges in Monday’s early global action.
In the U.S., fallout from Hurricane Harvey, now a tropical storm that continued to dump devastating rain in much of Texas, including on key oil refining areas, was holding back the dollar. The storm’s economic implications weren’t entirely known as the situation remained perilous.
The euro fetched $1.1935, and earlier touched $1.1953, compared to $1.1923 late Friday in New York. It gained 1.3% for all of last week. The shared currency was on track for a sixth straight month of gains against the dollar – its best run in five years.
Even as the euro hammered the dollar, a broad measure of the greenback did manage to claw back to positive territory. The ICE U.S. Dollar Indexa gauge of the greenback against six rivals, traded at 92.43, up 0.1% from 92.34 in late New York trading Friday. That’s an improvement from an intraday low of 92.36, which was its weakest level so far for 2017. Last week, the index lost 0.9%.
The WSJ Dollar Index  a broader measure of the buck’s movement, shed 0.1% to 85.53, as it continues to drift near the lowest level of the year.
While neither the Federal Reserve’s Janet Yellen nor Draghi discussed a specific monetary policy strategy in their speeches last week at the Fed’s Jackson Hole, Wyo., retreat, Draghi suggested the interest-rate stance would remain loose in the eurozone even as quantitative easing eventually sunsets. He also continued to talk optimistically about the European economic recovery.
Fed’s Yellen muted remarks reinforced market expectations for no more than one additional interest-rate hike this year, and odds for it aren’t solid.
“Fed rate-hike expectations are still subdued, while the ECB could very well provide some hints regarding an eventual reduction in its asset purchases as early as at the upcoming policy meeting next week,” said Charalambos Pissouros, senior analyst with IronFX.
Meanwhile, the British pound   was changing hands at $1.2903 versus $1.2881 late on Friday. Sterling gained 0.4% since last week Friday.
Against the Japanese yen  the dollar slipped to ¥109.22, compared with ¥109.35 late Friday in New York. It remains above the fourth-month low of ¥108.60 touched in the middle of August.
Euro hits 2 1/2-year high close to $1.20 Euro hits 2 1/2-year high close to $1.20 Reviewed by Alexander Von Stern on 03:34:00 Rating: 5