* Euro edges back toward 2-week highs hit after ECB stands
* Dollar rose overnight as oil price rise stoked inflation
TOKYO, Sept 9 The dollar bumped down from its
overnight highs in early Asian trade on Friday, on track for
weekly losses in a week marked by continuing uncertainty about
U.S. monetary policy, while the euro firmed after the European
Central Bank stood pat.
The dollar index, which tracks the greenback against a
basket of six major rival currencies, was down 0.1 percent at
94.920, poised to slip 1 percent for the week. On
Thursday, it plumbed a two-week low of 94.465, before rebounding
after crude oil inventory data.
Against its Japanese counterpart, the dollar edged down 0.2
percent to 102.25 yen, down 1.7 percent for the week.
The dollar touched its session highs on Thursday after a
drop in crude oil inventories. Subsequently higher spot oil
prices raised U.S. inflation expectations, which led some
investors to speculate that the Federal Reserve could hike
interest rates sooner rather than later despite a recent spate
of disappointing economic data.
"The market was short dollars ahead of the weekend, and it
was a good excuse for short-term guys to buy it back," said
Kaneo Ogino, director at foreign exchange research firm
Global-info Co in Tokyo.
"But I think Japanese commercial orders emerge whenever the
dollar/yen gets down to the 101 level," he said.
A disappointing U.S. nonfarm payrolls report a week ago and
a weaker-than-expected service sector survey on Tuesday led some
investors to trim bets that the Fed would be raising rates as
early as this month, despite a chorus of Fed officials
signalling that the time to hike was approaching.
The euro edged up 0.1 percent in early Asian trade to
$1.1265, up 1 percent for the week and moving back toward
a two-week high of $1.1328 hit overnight, after the ECB left
interest rates unchanged.
The ECB kept the door open to more stimulus but gave no
explicit hints about its next move, and ECB head Mario Draghi
said that further expanding its asset-purchase program had not
even come up for discussion.
"Draghi appeared to be taking a page from the footballers by
going on the offense as reporters' questions put him on the
defensive," wrote Marc Chandler, global head of currency
strategy at Brown Brothers Harriman.
Draghi "vigorously defended the combination of orthodox and
unorthodox policies, claiming they are effective," Chandler
Sterling was steady on the day at $1.3298, on track
for a slight weekly gain, but retreating from a seven-week peak
of $1.3445 scaled on Tuesday and pressured by hawkish comments
from Bank of England Governor Mark Carney.
Carney reiterated to lawmakers his view that the central
bank stood ready to take "whatever action is needed" to help the
economy weather the effects of the UK's June vote to exit the
(Reporting by Lisa Twaronite; Editing by Eric Meijer)