July 26, 2018 / 7:23 PM / 5 months ago

FOREX-Euro drops most in a month as ECB stays on course

    * ECB not budging on timeline on normalizing monetary policy
    * ECB's Draghi raises concerns about trade on euro zone
growth
    * Pound falls after EU rejects key parts of Britain's plan
    * Chinese yuan weakens, reverses Wednesday's bounce 
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Updates to afternoon market action)
    By Richard Leong
    NEW YORK, July 26 (Reuters) - The euro fell on Thursday,
declining the most in a month, as the European Central Bank
clung to its easy money policy and signaled no change in its
timetable to move away from ultra low rates or end its bond
purchase program.
    Sterling, already pressured by a strong dollar, fell on the
European Union's rejection of key elements of Britain's new
trade proposals after it leaves the EU, known as Brexit.

    ECB President Mario Draghi said at a press conference
following the ECB's policy decision while he was confident 
regional inflation would reach the ECB's 2 percent target,
rising tariffs and other trade barriers would hurt the growth of
the 19-member economic bloc.
    "You saw Draghi definitely taking a dovish approach," said
Chuck Tomes, senior investment analyst at Manulife Asset
Management in Boston. "He's focused on the current environment
where he's concerned about trade."
    Draghi's reticence persisted in the aftermath of a meeting
between U.S. President Donald Trump and European Commission
chief Jean-Claude Juncker on Wednesday.
    Trump agreed to refrain from imposing tariffs on
European-made cars, while the two sides started discussions on
reducing other trade barriers in a bid to avert a transatlantic
trade war.
    Still doubts remain on what would transpire from the talks,
analysts said.
    The euro was down 0.7 percent at $1.16420 and 0.5
percent lower at 129.480 yen, EBS data showed.
    In addition to the euro, the greenback strengthened against
other major currencies.
    The U.S. economy has continued to exhibit solid growth
despite trade tensions with other countries.
    Domestic core capital goods orders rose 0.6 percent in June,
beating a 0.4 percent increase forecast by analysts polled by
Reuters.
    An index that tracks the dollar against six major currencies
 was up 0.4 percent at 94.765, rebounding from a two-week
low reached earlier Thursday.
    The pound fell 0.65 percent to $1.3109.
    Meanwhile, another drop by the Chinese currency after
Wednesday's bounce undermined broader risk appetite in markets.
    The offshore yuan fell 0.8 percent to 6.8082 to the
dollar, wiping out all of Wednesday's gain and approaching the
13-month low of 6.8200 it reached on Tuesday.
    A drop of more than 6 percent in the value of the Chinese
currency since mid-June as trade tensions escalated has put
pressure on export-oriented emerging markets.
    Investors increased bearish positions over the past two
weeks on all emerging Asian currencies, according to a Reuters
poll.   
========================================================
    Currency bid prices at 2:49PM (1849 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1643        $1.1728     -0.72%         -2.94%      +1.1743     +1.1640
 Dollar/Yen       JPY=        111.2200       110.9700    +0.23%         -1.29%      +111.2400   +110.5900
 Euro/Yen         EURJPY=     129.50         130.14      -0.49%         -4.20%      +130.2700   +129.4500
 Dollar/Swiss     CHF=        0.9946         0.9917      +0.29%         +2.08%      +0.9949     +0.9904
 Sterling/Dollar  GBP=        1.3107         1.3187      -0.61%         -3.00%      +1.3213     +1.3107
 Dollar/Canadian  CAD=        1.3064         1.3044      +0.15%         +3.87%      +1.3092     +1.3025
 Australian/Doll  AUD=        0.7375         0.7453      -1.05%         -5.46%      +0.7463     +0.7374
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1582         1.1632      -0.43%         -0.92%      +1.1638     +1.1576
 Euro/Sterling    EURGBP=     0.8882         0.8890      -0.09%         -0.01%      +0.8896     +0.8866
 NZ               NZD=        0.6784         0.6835      -0.75%         -4.26%      +0.6850     +0.6785
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.1876         8.1346      +0.65%         -0.24%      +8.1918     +8.1251
 Euro/Norway      EURNOK=     9.5334         9.5409      -0.08%         -3.20%      +9.5545     +9.5249
 Dollar/Sweden    SEK=        8.8121         8.7554      -0.09%         +7.44%      +8.8149     +8.7402
 Euro/Sweden      EURSEK=     10.2605        10.2702     -0.09%         +4.28%      +10.2825    +10.2520
     

    
 (Additional reporting by Saikat Chatterjee in LONDON; 
Editing by Marguerita Choy)
  
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