* Euro wallows at three-month lows vs USD
* ECB Draghi speech to take centre stage in quiet start to
* U.S. and UK markets shut for public holidays
By Ian Chua
SYDNEY, May 26 The euro slipped early on Monday,
while the other major currencies got off to a steady start as
the results of a presidential election in Ukraine and votes for
the European Parliament were so far greeted calmly by investors.
Dealers expect little action on Monday with U.S. markets
closed for Memorial Day, while UK markets are shut for the
Spring bank holiday.
The common currency last traded at $1.3629 compared
with around $1.3631 late in New York on Friday. It briefly
dipped to $1.3615, a low not seen since mid-February. Against
the yen, it was a touch softer at 138.96.
The euro has fallen more than 2 percent on the greenback
since May 5 amid mounting expectations that the European Central
Bank (ECB) will ease policy next month.
In the near term, it is seen drifting between $1.3600, where
large bids are said to be lurking and its 200-day moving average
Traders said the policy outlook will continue to be a
negative factor for the euro rather than results of the weekend
Billionaire Petro Poroshenko claimed Ukraine's presidency on
Sunday and vowed to end a conflict with pro-Russian rebels. In
Europe, there was a general swing to Eurosceptic parties as
voters protested against austerity and mass unemployment.
"The reality is that these results - in France especially -
won't mean a whole lot in practise but optically it's an obvious
pretext for some pressure on euro and sterling," said Ray
Attrill, strategist at National Australia Bank in Sydney.
"The best hope for some life later today resides with a
keynote speech from ECB President Mario Draghi. Markets will be
looking for more clues as to what may be on offer following next
Thursday's ECB Council meeting," he said.
With the euro on the backfoot, the dollar index held
near a six-week peak of 80.443 set on Friday. Against the yen,
the greenback retested a 1-1/2 week high of 102.02 set on
The Australian dollar was little changed at
$0.9239, having formed a base just above 92 U.S. cents after a
recent selloff that saw it fall from 94 cents.
Markets seemed to have come to the realisation that the
Reserve Bank of Australia will keep interest rates at a record
low 2.5 percent for the foreseeable future.
In Asia, the Bank of Japan will release minutes of its April
policy meeting followed by a speech by BOJ Deputy Governor Kikuo
With the BOJ having repeatedly expressed confidence that its
policy setting is delivering desired results, traders expect the
minutes to reveal nothing new.
On Saturday, BOJ Governor Haruhiko Kuroda repeated his view
that the world's third-largest economy is making steady progress
toward meeting the central bank's 2 percent price target.
He said the bank still has policy options left if it were to
ease monetary policy further to fend off risks that may threaten
the achievement of its price target.
(Editing by Shri Navaratnam)