* Draghi says will monitor impact of euro strength
* Yen on course to log seven straight weeks of fall
* Pound recovers after incoming BoE chief drops no easing
* Aussie near 3-month low; RBA, China data in focus
By Hideyuki Sano
TOKYO, Feb 8 The euro hovered near two-week low
on Friday after the European Central Bank chief spoke on
Thursday, said he would monitor the impact of the currency's
strength, making more straightforward remarks on the exchange
rate than many had expected.
ECB President Mario Draghi said on Thursday that the
exchange rate is important for growth and price stability and
that he wants to see "whether the appreciation is sustained and
will alter our risk assessment as far as price stability is
The euro traded at $1.3392, close to its late U.S.
levels after having fallen 0.9 percent on Thursday. At one point
it fell as low as $1.33705, the lowest since Jan. 25
Draghi said economic activity in the euro area should
recover gradually in 2013 but added there are more negative
risks than positive.
"I got the impression that he went into greater depth than
expected...given that last month he just read out a G20
statement, when he was talking about currencies," said Teppei
Ino, currency analyst at the Bank of Tokyo-Mitsubishi UFJ.
Traders are not yet convinced whether the euro's uptrend
since late last year is coming to an end. But that could happen
if investor fears of political uncertainty in Italy and Spain
intensify in coming weeks.
The euro also slipped to two-week low against the British
pound, which broadly strengthened after incoming Bank of England
governor Mark Carney gave no hints that he favoured immediate
easing monetary policy.
The pound also rose against the dollar to $1.5714,
off six-month low of $1.5630 hit on Monday.
The single currency also slipped against the yen from
33-month high of 127.71 yen set on Wednesday to trade at 125.32
Against the dollar, the yen stood at 93.64 yen per dollar
, not far from 33-month low of 94.075 hit earlier in the
The dollar/yen is up nearly one percent so far this week in
its seventh straight week of gains as investors sold the yen on
expectations that Japan will pursue aggressive monetary easing
to shore up the economy.
The Australian dollar slipped to three-month lows against
the dollar. The currency has many potential trading factors on
Friday, starting from the RBA's quarterly policy statement at
0030 GMT. Analysts expect it to trim near-term forecasts for
inflation and economic growth, leaving the door wide open for a
further rate cut in coming months.
That will be followed by a string of economic data from
China, Australia's top trade partner.