* Yellen focuses on financial regulation
* Investors await Draghi speech (Updates prices, adds comments, byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 25 (Reuters) - The dollar fell to a three-week low against the euro and a one-week trough versus the yen on Friday after Federal Reserve Chair Janet Yellen made no reference to U.S. monetary policy in her speech at the annual central bank research conference in Jackson Hole, Wyoming.
Investors were not expecting Yellen to make a policy statement anyway, but some market participants were hoping for some signal on the Fed’s planned balance sheet reduction, if not on the outlook for U.S. interest rate hikes.
“At this point, there isn’t too much for Yellen to add,” said currency strategist Sireen Haraji of Mizuho Corporate Bank in New York.
“The FOMC (Federal Open Market Committee) has been very clear in terms of communicating their intention to continue tightening policy very gradually, and I don’t think they see anything to change that view.”
Instead, Yellen focused on U.S. regulations, saying those put in place after the 2007-2009 crisis had strengthened the financial system without impeding economic growth, and any future changes should remain modest.
The dollar fell to a one-week low of 109.23 yen after Yellen’s speech. It was last down 0.2 percent at 109.33.
The euro, meanwhile, hit a three-week high against the dollar and was last up 0.6 percent at $1.1862.
Marc Chandler, chief global currency strategist of Brown Brothers Harriman in New York, said the dollar had weakened because Yellen “didn’t say anything positive for the U.S.”
The dollar has been trading higher for most of this week after sharp losses in recent months. But Chandler said its upward move was about to end and that it should resume its downtrend.
After Yellen, investors were looking to European Central Bank President Mario Draghi’s speech later on Friday, but like the Fed chair, he may end up not delivering any monetary policy message.
“It is fair to say that Mr. Draghi is the ‘headline act,’” said market analyst David Madden of CMC Markets in London.
“The ECB chief will probably use the speech to congratulate himself on the recovery of the euro zone, thanks to the loose monetary policy,” Madden said, “but he might use the relatively low inflation rate as an excuse not to talk about reining in the stimulus package.” (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting Dion Rabioun; Editing by Chizu Nomiyama and Lisa Von Ahn)