* Euro slips to one-month lows vs USD
* ECB's Draghi says committed to also using unconventional
* U.S. non-farm payrolls due later could add to USD appeal
By Ian Chua
SYDNEY, April 4 The euro traded at one-month
lows against the dollar early on Friday, having suffered a bit
of a setback after the European Central Bank notched up its
dovish rhetoric following a widely expected decision to leave
interest rates unchanged.
ECB President Mario Draghi said the Governing Council was
unanimous in its commitment to also using "unconventional
instruments within its mandate in order to cope effectively with
risks of a too prolonged period of low inflation".
Long used to seeing the ECB drag its feet on any actual
policy action, investors half took the bait and sold the euro.
The common currency dipped a modest 0.3 percent as a result,
falling to a low of $1.3698 before edging back to
Against the yen, the euro slipped to 142.59,
pulling away from a four-week peak of 143.48 set on Wednesday.
"We continue to believe that the ECB is running unnecessary
risks in its slow response to low inflation and expect
non-conventional monetary easing measures before year-end,"
analysts at Barclays Capital wrote in a note to clients.
The unconventional instruments included quantitative easing,
the printing of money to buy assets, measures that previously
were considered highly undesirable by some euro zone central
The setback in the euro saw the dollar index climb to
its highest level since Feb 27. The greenback also extended
gains on the yen, popping above 104.00 for the first time
since Jan 23. It last traded at 103.93 yen.
Traders said the dollar could move higher still if U.S.
non-farm payrolls due later in the day surprised on the upside.
Analysts polled by Reuters expect the economy to have created
200,000 jobs in March.
Hopes are growing that U.S. growth will accelerate as the
grip of a harsh winter loosens.
"We think a number near consensus would provide more
reassurance that the U.S. economy is emerging from its winter
freeze and would be sufficient to maintain and extend the USD's
gains seen earlier this week," analysts at BNP Paribas said.
Such an outcome would come as a relief to Australia's
central bank, which has long complained that the Aussie dollar
is historically high.
Earlier this week, the Aussie climbed a four-month peak of
$0.9310, although it has since retreated toward$0.9200.
Any renewed vigour in the greenback could see AUD/USD target
$0.9190, then $0.9152, the 38.2 percent and 50 percent
retracement levels of the March 20 to April 1 rally.
Asia is void of any meaningful economic data on Friday,
leaving the focus squarely on U.S. jobs report.
(Editing by Leslie Adler)