Investing.com - The U.S. dollar rose against a currency basket on Monday while the euro fell to one-week lows after European Central Bank President Mario Draghi downplayed calls for the bank to scale back its stimulus program.
EUR/USD hit lows of 1.0706 and was last at 1.0738, off 0.43% for the day.
The euro hits the day’s lows after Draghi said the recent rise in euro zone inflation is temporary and due almost entirely to rising oil prices and reiterated that underlying inflation remains very subdued.
The euro had already come under pressure earlier in the day as concerns over the possibility of a Brexit or Trump-style shock result in France’s presidential election refocused investors’ attention back to the political risks facing the euro zone.
Marine Le Pen, head of the far-right National Front party, launched her presidential bid on Sunday with promises to exit the euro zone and protect France against globalization.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.36% to 100.05, boosted by the weaker euro.
The dollar steadied after falling on Friday when the latest U.S. employment report showed that while jobs growth beat expectations last month wage growth remained tepid.
The slowdown in wage growth looked likely prompt the Federal Reserve to adopt a more cautious approach on raising interest rates this year.
The Fed, which last hiked rates in December, has forecast three rate hikes this year.
According to Investing.com's Fed Rate Monitor Tool less than 10% of traders expect the Fed to raise interest rates at its next meeting in March. The chance of a June increase is seen at just below 50%.
The dollar was lower against the safe haven yen as uncertainty over President Donald Trump's policies continued to weigh, with USD/JPY down 0.27% at 112.36, not far from last Thursday’s lows of 112.04, the weakest since November 30.
Sterling was near one-week lows, with GBP/USD down 0.27% at 1.2450 as a parliamentary debate on a law giving Prime Minister Theresa May the right to trigger Brexit proceedings continued.