* US dollar gains against euro on Draghi comments
* Euro earlier rose to a 2-1/2 year high against the US
* Dollar index rises 0.15 percent
(Updates prices, adds comments, changes byline, dateline,
By Karen Brettell
NEW YORK, May 8 The dollar gained against the
euro on Thursday after European Central Bank President Mario
Draghi said the bank may act to stem falling inflation at its
June meeting, erasing earlier losses that saw the dollar fall to
a 2-1/2 year low.
Draghi said that the ECB's governing council is comfortable
with the bank acting in June, depending on staff projections.
Many economists expect a downward revision in the ECB
staff's inflation forecasts, which could open the way for more
stimulus such as an interest rate cut or new liquidity
"They signaled through the press conference that a rate cut
is likely in June, that has capped the move higher in the euro,"
said Martin Schwerdtfeger, a foreign exchange strategist at TD
Securities in Toronto, Canada.
The euro was last down 0.26 percent against the
dollar at $1.3874. It earlier rose to $1.3992, the highest since
Investors were also focused on testimony from Federal
Reserve Chair Janet Yellen on the economic outlook before the
Senate Budget Committee.
On Wednesday, Yellen said a slumping housing market and
geopolitical tensions risk undermining the U.S. economy and bear
close watching by the U.S. central bank.
The dollar was up 0.14 percent against the Japanese yen
at 101.75. The dollar was down 0.16 percent against the
Swiss franc to trade at 0.8778 francs.
The U.S. dollar index, which measures the dollar
against six major currencies, gained 0.15 percent to 79.32.