Dollar steady after Comey testimony; euro falls as ECB holds rates

Thu Jun 8, 2017 3:46pm EDT
 
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By Saqib Iqbal Ahmed

NEW YORK (Reuters) - The greenback clung to slim gains against a basket of currencies on Thursday as investors took stock of former FBI Director James Comey's testimony to the U.S. Senate, while the euro weakened after the European Central Bank kept interest rates on hold.

Comey on Thursday accused President Donald Trump of firing him to try to undermine the bureau's investigation into possible collusion between Trump's 2016 presidential campaign team and Russia, but did not say whether he thought the president sought to obstruct justice. [nL1N1J50C1]

The dollar index .DXY, which tracks the greenback against six major currencies, was up 0.25 percent at 96.99, little changed from before the testimony.

"We don't really know anything today that we didn't really know yesterday. To me, there was nothing really to react to,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

Against the yen, the greenback was up 0.18 percent to 109.99 yen, after rising to a two-day high of 110.38 yen.

The euro fell after the ECB cut its forecasts for inflation and said policymakers had not discussed scaling back the bank's massive bond-buying program.

The euro, which weakened on Wednesday on reports that the ECB would cut its inflation forecasts, was down 0.38 percent to $1.1212, after dipping to $1.1196, its lowest level since May 31.

"Even though it was well telegraphed over the last 24 hours, the future expectations on inflation came in a bit lower than the market had been anticipating," said Dean Popplewell, chief currency strategist at Oanda in Toronto. "That sort of weighed on the euro."   Continued...

 
Dollar, Euro and Pound banknotes are seen in this picture illustration taken April 28, 2017. REUTERS/Dado Ruvic/Illustration