* March U.S. existing home sales dip less than expected
* ECB's Draghi speech may weigh on euro
* Euro zone PMIs and German IFO a key focus
(Recasts with New York trade, changes dateline and byline,
By Daniel Bases
NEW YORK, April 22 Investors trimmed their
positions of U.S. dollars on Tuesday after a two-week run
higher, unmoved by a U.S. March existing home sales report that
beat expectations but showed a modest decline from the prior
Trading ranges remained narrow as Europe returned from the
Easter holidays and faced uncertainty over whether European
Central Bank policy will move toward more monetary stimulus.
The euro gave up some of its modest gains, but remained
positive against the greenback and yen.
U.S. existing home sales slipped by 0.2 percent in March
compared to February, but annual unit sales, while the lowest
since July 2012, beat forecasts.
European Central Bank President Mario Draghi recently made
clear the euro's strength is a possible trigger for the central
bank to ease monetary policy. He is scheduled to give a keynote
speech in Amsterdam on Thursday.
ECB executive board member Benoit Coeure said on Tuesday
that there was further margin to reduce the main interest rate
below 0.25 percent and that the strength of the euro could be
keeping inflation too low.
But until the ECB takes action, traders said the euro was
unlikely to weaken much, thus keeping it tied to a range.
The euro slipped to a two-week low of $1.3783, a
slight loss on the session before rebounding to trade unchanged
amid low volumes.
"For all the talk of unorthodox measures, the euro has been
rock solid. It may be constraining the upside, but it is not
beating it down either. The euro bears are long exhausted here,"
said Alan Ruskin, global head of G10 FX strategy at Deutsche
Bank in New York.
Investors are also awaiting euro zone 'flash' PMI surveys on
Wednesday while the German IFO institute's monthly reading of
business sentiment in Europe's largest economy
is due a day later.
"Euro/dollar is likely to trade with a weaker bias this week
given the German IFO and Draghi's speech coming up," said Yujiro
Goto, currency analyst at Nomura. "Any downside will be limited
though, as investors will await the inflation data due next
Very weak inflation in the euro zone, due partly to the
strong exchange rate, has raised pressure on the ECB to further
loosen monetary policy to stimulate growth.
In the past few weeks Draghi has brought the currency into
focus and warned that any further strengthening could lead the
euro zone's central bank to use unconventional tools such as
On the other hand, analysts said the dollar was starting to
look attractive on the back of improving U.S. data and earnings.
"Better-than-expected company earnings could also encourage
renewed inflows into the U.S. stock markets and underpin the
dollar," said Citi analyst Valentin Marinov.
The dollar was steady at 102.65 yen, after rising as
high as 102.73 yen, its highest since April 8
(Addiitonal reporting by Anirban Nag in London; Editing by Mark
Trevelyan and Tom Brown)