* ECB launches review that will redefine its mission and
tools
* Yuan has lost more than 1% since Monday as virus spreads
(Recasts, updates rates, adds comments from after open of U.S.
market; new byline, dateline; previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Jan 23 (Reuters) - The dollar rose against the
euro on Thursday after the European Central Bank left unchanged
its key interest rates and stimulus programs and launched a
broad review of its policy that was likely to see new President
Christine Lagarde redefine the ECB's main goal and how to
achieve it.
The euro zone's central bank has fallen short of its
inflation target of just under 2% for years, even after
Lagarde's predecessor, Mario Draghi, launched increasingly
aggressive stimulus measures.
"We will not leave any stone unturned and how we measure
inflation is clearly something we need to look at," Lagarde
said.
"Basically, what she is saying is that they are reassessing
some of the tools they have been using for basically a decade to
booster up inflation to no avail," said Minh Trang, senior FX
trader at Silicon Valley Bank in Santa Clara, California.
ECB rate-setters did not make any policy change on Thursday,
simply standing by their pledge to keep buying bonds and, if
needed, cut interest rates until price growth in the euro zone
heads back to their goal.
The euro was 0.25% lower against the greenback at $1.1063,
its weakest since Dec. 9.
The Japanese yen strengthened and China's yuan fell to a
two-week low on Thursday as investors grew more anxious about
the spread of a virus in China.
Deaths from the flu-like coronavirus stand at 17 and almost
600 people are infected. China has locked down Wuhan, a city of
11 million people, where the outbreak was believed to have
originated. The moves up in the safe-haven yen and down in the yuan were
measured, suggesting investors were not yet panicking about the
virus.
Against the yen, which tends to draw investors during times
of geopolitical or financial stress, the dollar was 0.36% lower
at 109.43 yen.
The dollar gained 0.36% versus the offshore Chinese yuan
CNH= to 6.9337 yuan. The Chinese currency has now lost more
than 1% of its value since it touched six-month highs on Monday.
The onshore yuan CNY=CFXS is on course for its worst week
since August. Sterling was 0.24% lower, but remained close to a 2-week
high hit on Wednesday, as data this week reduced market
expectations of a interest rate cut at next week's Bank of
England policy meeting.
Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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