Euro surges to two-and-a-half year after Draghi comments, oil up after Harvey

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Euro surges to two-and-a-half year after Draghi comments, oil up after Harvey

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By Nichola Saminather SINGAPORE (Reuters) – The euro surged to its highest level since January 2015 against the dollar early on Monday, after European Central Bank President Mario Draghi failed to talk down the single currency’s strength as had been expected. Oil prices inched higher after Tropical Storm Harvey struck Texas over the weekend at the heart of the United States’ oil and gas industry, forcing operators to close several refineries and evacuate and close offshore platforms. Japanese <JNIc1> and Australian <YAPcm1> stock futures were pointing to higher opens, but S&P E-mini futures <ESc1> were marginally lower. Speaking at the U.S. Federal Reserve’s annual conference in Jackson Hole, Wyoming, Draghi said the ECB’s ultra-easy monetary policy was working and the euro zone’s economic recovery has taken hold, but didn’t cite the common currency’s strength as a concern or discuss monetary policy specifically. The euro <EUR=EBS> advanced 0.3 percent to $1.1953 on Monday, extending Friday’s 1 percent jump. “The EUR bulls will feed off anything they can get that suggests a less accommodative stance going forward,” Chris Weston, chief market strategist at IG in Melbourne, wrote in a note. The dollar was slightly lower at 109.26 yen after sliding 0.2 percent on Friday after Federal Reserve Chair Janet Yellen, speaking before Draghi at the same event, also didn’t address policy. Yellen’s remarks disappointed some investors who’d hoped for hints on the Fed’s path on interest rates and sent 10-year U.S. Treasury yields <US10YT=RR> to their lowest level in a month. Investors viewed her remarks as reducing the likelihood the U.S. central bank will raise interest rates in December. U.S. oil <CLc1> inched higher to $47.88 a barrel, adding to Friday’s 0.9 percent gain. The Gulf Coast, where Texas is located, is home to about nearly half of the nation’s refining capacity, and the reduced supply could affect gasoline supplies across the U.S. Southeast and other parts of the country.

(Reporting by Nichola Saminather; Editing by Richard Pullin)
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