Euro helped higher towards 1.12 on less dovish Draghi

The euro was lifted higher to reach close to the $1.12 level after comments from European Central Bank President Mario Draghi on Wednesday. Draghi’s relatively hawkish comments confounded some market expectations that the ECB was close to expanding its asset buys and sent the euro slightly stronger. But instead, Draghi said the ECB needed more time to decide on whether further stimulus is required.

The euro rose to $1.1193, having bounced back from three-week low of $1.1105 touched on Wednesday.

“The asset purchase programme has sufficient in-built flexibility,” Draghi told the European Parliament’s Committee on Economic and Monetary Affairs in Brussels on Wednesday. “We will adjust its size, composition and duration as appropriate, if more monetary policy impulse should become necessary.”

The Australian dollar, often used as a proxy for China-related trades, struggled near a two-week low of $0.6989. There are growing concerns over the health of China’s economy, especially after disappointing manufacturing PMI data on Wednesday. Factory activity in the world’s second largest economy fell to a six year low.

The yen has been stuck in a narrow trading range over the past week and last stood little changed at 120.00 to the dollar.

Oil prices slipped toward the lower end of their trading ranges in the past week as the bullish impact from lower crude inventories was offset by large gasoline builds that raised concerns about high autumn fuel supplies.

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