The euro rose to the day’s highs on Thursday after European Central Bank President Mario Draghi said euro area growth is “solid and broad based”, before adding that the ECB didn’t discuss plans for its June meeting.
EUR/USD touched a high of 1.2210 before pulling back slightly to trade at around 1.2192 by 09:38 AM ET (13:38 GMT).
The euro received a boost after Draghi said that euro area growth is expected to remain “solid and broad-based”, but he noted that growth seems to have moderated broadly recently, with some countries experiencing a loss of momentum.
Speaking at the ECB’s post policy meeting press conference, Draghi also warned that global risks such as protectionism have risen – a clear reference to U.S. President Donald Trump’s trade spat with China.
The euro subsequently pared back some gains after the ECB head said the central bank didn’t discuss plans for its June meeting, when many investors had expected officials to set out a roadmap for future monetary policy plans.
The ECB left euro zone interest rates unchanged earlier Thursday and reiterated its pledge to continue buying government bonds until at least the end of September, or until inflation has risen sustainably close to its target.
Meanwhile, the dollar eased back from three-and-a-half month highs against a currency basket as investors took a breather after a recent rally driven by rising Treasury yields.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.24% to 90.81, backing off Wednesday’s highs of 91.04, the most since January 12.
Rising U.S. yields and the prospect of a faster pace of rate hikes by the Federal Reserve this year have boosted the dollar in recent sessions. Expectations of higher interest rates make the dollar more attractive to investors seeking yield.
The yield on 10-year U.S. Treasury notes rose above 3% for the first time since 2014 this week, a sign of confidence in the outlook for the U.S. economy.