* Dollar index extends gains, approaches one-year peak
* Draghi, data drag down euro
* Euro at 19-month low vs Swiss franc
(Adds New York open, euro's low against Swiss franc; changes
byline and dateline; previous LONDON)
By Michael Connor
NEW YORK, Aug 25 The dollar rose on Monday as
the euro dropped on weak German economic data and comments by
European Central Bank chief Mario Draghi raised market
expectations of quantitative easing in the euro zone.
The U.S. dollar index, which values the greenback
against a basket of a half dozen major currencies, was up 0.22
percent in early New York trading after touching a 2014 high of
The index, which was up for a seventh straight session, was
last at these levels in September 2013.
"The (dollar) is strong, but most importantly the (euro) is
weak, having dropped to a fresh 11-month low on President
Draghi's recognition that inflation expectations have fallen,"
said Scotia Capital strategist Camilla Sutton in Toronto.
Germany's Ifo business climate index, based on a monthly
survey of some 7,000 companies, fell to 106.3 from 108,
undershooting a Reuters consensus forecast of 107, as a conflict
between Russia and Ukraine took its toll on Europe's biggest
The data added to expectations that the ECB may have to ease
policy sooner rather than later and drove down yields on most
euro zone government bonds to record lows.
The euro skidded against the dollar to $1.3184 after
the Ifo survey was released, its lowest since September 2013. It
was last trading at $1.3196 down about 0.4 percent on the day.
The euro also touched a 19-month low against the
Swiss franc on the first day of trading after Draghi's speech.
The currency shared by 18 countries last stood at 1.2083 versus
the franc after touching a low of 1.208 last seen in
In stronger language than he has used in the past, ECB head
Draghi said on Friday the central bank was prepared to respond
with all its "available" tools should inflation drop further.
The ECB holds its next policy review on Sept. 4.
"The FX market has interpreted Draghi's statement as meaning
that broad-based asset purchases, or quantitative easing, has
now become more likely," said Lutz Karpowitz, currency
strategist at Commerzbank.
(Reporting by Michael Connor in New York; Editing by James