* Dollar index pulls further away from 4-1/2-month lows
* Prospects of ECB moving away from easy policy tempered for
* Pound steady after Britain's triggering of Article 50
* Views on GBP split as London gears up for formal divorce
(Updates prices, adds details and quotes)
By Shinichi Saoshiro
TOKYO, March 30 The dollar edged up to a
nine-day high against a basket of currencies on Thursday, with
the euro sagging as the European Central Bank showed no sign of
stepping away from monetary easing anytime soon.
The U.S. currency was up 0.3 percent at 111.385 yen,
putting some distance between the four-month low of 110.110 it
plumbed on Monday.
The euro dipped 0.2 percent to $1.0745, having
drifted down from a 4-1/2-month high of $1.0906 scaled on
The common currency had dropped about 0.5 percent overnight
following a report by Reuters that European Central Bank
policymakers were wary of changing their policy message after
tweaks this month had raised expectations of the central bank
ending its super-easy policy and eventually hiking interest
"The market may have gotten ahead of itself on its
expectations towards the ECB ending its easy policy and the news
helped temper such speculation," said Junichi Ishikawa, senior
FX strategist at IG Securities in Tokyo.
"That said, the ECB seems set on finding a way out of its
easy policy, so it would be difficult for the euro to keep
declining. It is no longer a case of the euro being sold on easy
policy expectations, with German bund yields settled firmly in
The euro was boosted earlier in the month by a report that
the ECB had discussed the possibility of raising interest rates
before the end of its quantitative easing programme.
The pound inched up 0.1 percent to $1.2450
following choppy moves the previous day.
Sterling swung between $1.2478 and an eight-day low of
$1.2377 on Wednesday before ending little changed, unable to
find clear direction from Britain's formal triggering of its
exit from the European Union.
"We expect the triggering of Article 50 to initiate a 'sell
the rumour, buy the fact' rebound in GBP from historic
undervaluation as ambiguity over Brexit recedes," currency
strategists at Barclays wrote, saying the markets had
overestimated the downside to the pound resulting from Brexit.
Others, however, saw downside risks to sterling amid
potential upcoming political uncertainty and the possibility of
Britain not being able to reach an exit deal with the EU during
their two-year negotiation period.
HSBC sees the pound falling to $1.10 by the end of 2017 and
the euro, currently around 86.40 pence, advancing to
parity with sterling.
The dollar index against a group of major currencies was up
0.1 percent at 100.100 after rising overnight to 100.140,
its highest since March 21.
The greenback was also boosted by Chicago Fed President
Charles Evans, who said he was in line with most of his
colleagues in supporting further rate hikes this year.
The dollar benefited as some of the dust began to settle
after its tumble earlier in the week to 4-1/2-month lows.
The currency slumped on Monday after the U.S. House of
Representatives pulled a bill to overhaul U.S. healthcare
insurance, which knocked the wind out of the dollar-supportive
The Australian dollar lost 0.1 percent to $0.7665
and the New Zealand dollar slipped 0.2 percent to $0.7021
against the resurgent dollar.
(Reporting by Shinichi Saoshiro; Editing by Eric Meijer)