* ECB to meet on Thursday amid rally in euro

LONDON, Jan 25 (Reuters) - The dollar stumbled near multi-year lows on Thursday following the U.S. treasury secretary’s comments that he welcomed a weaker greenback, while attention turned to whether the European Central Bank can stomach a surging euro at its policy decision. The dollar index, which measures the greenback against a basket of six major currencies, was little changed on the day at 89.209, after dropping as low as 88.438, its lowest since December 2014. “But it still doesn’t sound like they really want a strong dollar given the fact that they are aiming to boost exports.”

Trump decided to impose steep import tariffs earlier in the week on washing machines and solar panels, flaming worries about trade protectionism that sent the greenback on the defensive. The euro jumped about 1 percent to $1.2536, its highest since mid-December 2014, before paring gains to trade up 0.12 percent against the dollar.
Mario Draghi, the President of the European Central Bank, says that Mnuchin's comments are contrary to a decades-old agreement not to "target" each other's exchange rate. The European Central Bank keeps its policy unchanged for now despite citing the euro's surge as a source of uncertainty with respect to its strong currency policy.