NEW YORK CITY: The euro slipped against the dollar Monday after European Central Bank chief Mario Draghi voiced concern about rising interest rates and said the ECB could provide fresh liquidity to banks.
At 2200 GMT the euro was at $1.3493, compared with $1.3525 late Friday.
The yen gained modestly, the dollar falling to 98.83 yen from 99.34 yen and the euro dropping to 133.37 yen from 134.36.
Draghi told a hearing of the European Parliament's committee for economic and monetary affairs that the ECB was ready to use "any instrument including another LTRO if needed" (the ECB's long-term refinancing operation) to prevent a tightening of short-term money markets.
Eurozone banks have started repaying large chunks of LTRO loans made in 2011 and 2013 as financial markets have stabilized.
But paying that money back has tightened conditions in the money markets, Draghi said.
"While repayment of central bank credit is certainly a sign of normalization, the resulting reduction in excess liquidity can reinforce upward pressures on term money market rates," he said.
But the dollar's gain was limited, in part because Federal Reserve officials, in separate comments Monday, reinforced the message that the Fed needed to see more concrete improvement in the economy before cutting back its stimulus.
Last week the Fed stunned markets by keeping the stimulus unchanged, against widespread expectation that it was ready to cut back the $85 billion a month flow.
The British pound gained slightly, to $1.6041 from $1.6010, while the dollar rose to 0.9108 Swiss franc from 0.9100 franc.
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