Sterling strengthened to around 1.0865 against the euro, as the eurozone currency was hit by nerves over the appearance of Mr Draghi at the gathering of central bankers in Wyoming.
Markets are looking for the ECB chief to give hints about the future of the eurozone’s massive money-printing programme.
However, a difficult dilemma for Mr Draghi means he’s likely to dodge talking about policies when he speaks at Jackson Hole at around 7//8pm British time.
Sources at the ECB have tried to downplay the speech, but tensions are still sky-high as investors look for signs of the ECB’s next move.
The bond-buying programme is scheduled to end in December and rising growth points to signs of success for the bank.
The euro has surged in recent months amid expectations the so-called Quantitative Easing will soon be scaled back.
However, the stronger currency is problematic for monetary policymakers because it hurts exports and dampens inflation.
And pulling monetary support for the eurozone too soon could undo the fragile recovery.
Mr Draghi has previously said monetary support for the eurozone will remain in place until there are signs of meaningful price rises – but inflation still remains well below target.
The ECB also wants to keep the euro weaker so the bloc’s recovery is not at risk.
However, the bank is running out of bonds to buy, which it uses to push money into the economy.
David Madden, market analyst at CMC Markets UK, said: “Traders will be paying close attention to the speeches from Janet Yellen and Mario Draghi, which are due to take place today.
“To borrow an expression from the music industry, it is fair to say that Mr Draghi is the ‘headline act’.
“We were told by unnamed sources from the European Central Bank (ECB), that Mr Draghi will not be laying down the groundwork for the tapering of the stimulus package.
“The ECB chief will probably use the speech to congratulate himself on the recovery of the eurozone thanks to the loose monetary policy, but he might use the relatively low inflation rate as an excuse not to talk about reigning in the stimulus package.
“The ECB are buying €60 billion worth of government bonds per month, and traders know full well the central bank will run out of bonds to buy.
“The ECB will have to come up with alternative ways to keep the policy loose, because a weak euro will assist the eurozone.”
Craig Erlam, senior market analyst at Oanda, said: “Yellen’s remarks will be poured over by investors, primarily for clues on the future path of interest rates, with the prolonged period of low inflation now starting to unsettle some policy makers.
“The Fed had previously indicated that it plans to raise interest rates one more time this year but investors have been unconvinced for some time and recently, the scepticism has started to spill over into commentary from some policy makers.
“Swing voters within the FOMC, such as Jerome Powell and Robert Kaplan, appear to be among those that still need convincing, while others just appear to lack the belief they once had.
“Should nothing change then I expect the Fed will likely hold off until next year to raise interest rates further but with the committee appearing so split, it’s very difficult to call.”This is perfectly reflected in current market implied rate hike expectations.”