Investing.com - The euro touched fresh two-and-a-half year highs against the dollar on Monday after the president of the European Central Bank held off talking about the recent strength of the currency and markets fretted over the economic impact of Tropical Storm Harvey.
EUR/USD hit 1.1960, the strongest level since January 2015 and was at 1.1931 by 03:48 AM ET (07:48 GMT).
The euro rallied on Friday after ECB President Mario Draghi didn’t address the recent strength of the single currency in a speech at the Jackson Hole economic symposium.
Draghi also avoided giving new clues as to when the ECB might wind down its stimulus programs but acknowledged that the euro zone’s economic recovery is gaining ground.
Hopes that the ECB will soon announce plans to taper its bond-buying stimulus program have driven the euro up around 13% against the dollar so far this year.
A speech by Federal Reserve Chair Janet Yellen at the same conference made no reference to monetary policy, disappointing some investors who had hoped she would sound a hawkish tone.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 92.41 after falling as low as 92.30 earlier, the weakest since May 2016.
The dollar was also under pressure amid concerns over the impact of Tropical Storm Harvey on the U.S. economy after catastrophic flooding inundated Houston on Sunday.
The dollar was weaker against the yen, with USD/JPY sliding 0.19% to 109.15, but remained well above the four-month low of 108.605 touched on Aug. 18.
The traditional safe haven Swiss franc was at one-month highs against the dollar, with USD/CHF at 0.9545.
Sterling was little changed against the dollar, with GBP/USD at 1.2886, but remained close to an eight-year trough against the euro, with EUR/GBP last at 0.9256.
The euro has risen more than 8% against sterling so far this year, reflecting the diverging economic outlook for the euro zone and the UK and its implications for monetary policy.