(Corrects 3rd paragraph to show strong U.S. October jobs data did not weaken the dollar)
* Euro falls below $1.07 in early European trading
* Draghi comments on deposit rates spurs more selling
By Patrick Graham
LONDON, Nov 20 (Reuters) - Comments from European Central Bank chief Mario Draghi sent the euro down half a percent to below $1.07 on Friday after two days of gains which dealers now put down to a closing of trading positions by a handful of major investors. EUR=
Most major banks have stuck firmly to the view that the dollar will rise towards parity with the single currency in the months ahead as the U.S. Federal Reserve begins to lift interest rates while other central banks do the reverse.
Yet progress since a very robust batch of U.S. jobs data at the start of November has been tougher. The greenback fell last week against the basket of currencies used to measure its broader strength and is up just 0.3 percent this week.
Draghi said the ECB would do what it had to to raise inflation as fast as possible and pointed to the benefits of a cut in deposit rates to aid an expansion of its quantitative easing programme of bond-buying.
"We have had some more dovish comments from Draghi and that has driven the euro down just now," Rabobank strategist, Piotr Matys, said. "It does now seem like the ECB is heading down this road and the market is positioning for it."
By 0748 GMT, the dollar traded at $1.0683 per euro. It was also up 0.2 percent at 123.00 yen JPY= and 0.4 percent against the basket at 99.336.
"It does seem like the big euro bounce two days ago was one of the big institutions liquidating positions," a senior dealer at an international bank in London said.
"There has been some of that sort of trade in general this week and we may see the trend (for a stronger dollar) reestablish itself."
The euro also fell almost half percent against sterling and 0.3 percent against the Swiss franc. Speculation among market participants of intervention by the Swiss National Bank has intensified this week.
It traded at 69.90 pence and 1.0849 francs respectively.
(Editing by Louise Ireland)