Euro declined in European trade against a basket of major rivals, sharpening losses for the second straight session and hitting a three-week trough, while on track for the second weekly loss in a row.
Euro is hurting following ECB President Lagarde’s remarks, which reinforced bets the ECB will pause interest rate hikes at the September meeting.
However, recent strong US data bolstered the case for yet another interest rate hike by the Fed at the September meeting.
EUR/USD fell 0.25% to 1.0948, the lowest since July 10, with a session-high at 1.0988.
Euro lost 1% on Thursday against dollar, the sixth loss in seven days, and the largest since March 15.
Such a heavy loss came following Christine Lagarde’s somewhat bearish remarks.
Euro is down 1.5% so far this week against dollar, on track for the second weekly loss in a row.
As expected, the ECB raised interest rates by 25 basis points to 4.25%, the highest since October 2008.
ECB said that inflation in the euro zone continues to fall but remains much higher than the 2% target.
ECB President Christine Lagarde said raising interest rates at the September meeting depends solely on data.
Lagarde said the ECB is committed to bringing inflation down towards targets, with future policies remaining tight for a suitable duration until consumer prices decline enough.
Overall, Lagarde’s remarks reinforced bets the ECB will pause interest rates hikes at the September meeting as recent inflation data showed a reduction in consumer prices.
