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By Lewis Krauskopf
NEW YORK (Reuters) - The euro dropped on Thursday as the European Central Bank signalled caution on inflation and protectionism, while a gauge of global stocks edged higher as investors awaited more clarity on U.S. President Donald Trump's plan to impose import tariffs.
While the ECB took a small step toward weaning the euro zone economy off protracted stimulus by dropping its easing bias, ECB President Mario Draghi said monetary policy would remain "reactive" and that underlying inflation was subdued.
"They toned down the easing bias but there is still a willingness to ease and the tone of Draghi's comments was still dovish, stressing that there is still not a convincing uptrend in inflation," said Chris Scicluna, head of economic research at Daiwa Capital Markets.
Draghi also addressed the U.S. tariff plans, saying: "If you put tariffs against (those) who are your allies, one wonders who the enemies are."
MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.11 percent as the pan-European FTSEurofirst 300 index <.FTEU3> rose 1.02 percent.
"As has been in the past, what President Trump says and what finally actually materializes are two different things," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
"It might be just wise to sit on the sidelines before we get some more clarity."
The Dow Jones Industrial Average <.DJI> fell 75.2 points, or 0.3 percent, to 24,726.16, the S&P 500 <.SPX> lost 2.68 points, or 0.10 percent, to 2,724.12 and the Nasdaq Composite <.IXIC> dropped 1.99 points, or 0.03 percent, to 7,394.66.
"That's the big thing that's different this year versus last year: you're seeing more of this volatility as people try to sort out some new regimes that are out there," Delwiche said.
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Oil prices fell and were setting up for a second consecutive weekly drop as the dollar strengthened and concerns over rising U.S. crude production continued to mount on signs of an inventory build at a key U.S. storage hub.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)