* Euro up after Draghi reported saying QE a long way off
* Sterling helped by Carney, near 4-1/2-year high before GDP
* Asian session subdued with Japan shut for holiday
(New throughout, changes dateline from previous
By Patrick Graham
LONDON, April 29 The euro inched up against the
dollar on Tuesday, helped by comments from European Central Bank
policymakers cooling any expectations the bank will respond to
low inflation by easing monetary conditions further.
The euro has struggled to push past a series of barriers
since a first approach last month to the big psychological
figure of $1.40 prompted warnings from the ECB about the
But short-term euro zone interest rates continue to
push higher, boosting returns on the currency, and a source said
President Mario Draghi had told German lawmakers outright
money-printing by the bank was still a long way off.
Preliminary German numbers are also expected to
show inflation inching back up, easing pressure on the bank to
take action to fend off the risk of a cycle of falling prices
"Draghi's comments are one of the reasons the euro is
holding strong this morning," said Stephen Gallo, a strategist
with Canadian bank BMO in London.
"I think the market is coming to the realisation that they
are quite relaxed about the threat of disinflation, there are a
lot of temporary factors behind the fall in inflation."
Like many dealers and analysts, however, he underlined the
lack of appetite to test the ECB's resolve to take action
against a stronger euro and any resulting drop.
The common currency rose almost 0.1 percent to $1.3873
. It also rose 0.3 percent to 142.37 yen, well
above a one-week low of 140.99 yen seen on Monday.
Moves among major currencies were muted in Asia, as a public
holiday in Japan dampened trading activity.
The day's other big data release is UK gross domestic
product, set to show one of the brightest of developed world
economies improving further in the first quarter.
Sterling inched up 0.2 percent to $1.6840, helped
by comments on the economy's progress from Bank of England chief
Mark Carney in an interview with a regional newspaper.
He said recovery was broadening while reiterating there
remained a lot of slack in the labour market - reflecting the
concern over the sources of growth that may yet keep interest
rates low well into next year.
While sterling remains buoyant on the back of expectations
the bank will raise official returns on the pound in 2015, views
on its ability to add much to a 10 percent rise in the past 12
months are divided.
"We urge caution in GBP-USD today," analysts from
Commerzbank said in a morning note. "There is downward potential
today, as good GDP data for Q1 is likely to be priced in
(Editing by Andrew Heavens)