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Euro slips against dollar near 1.1335 after Lagarde’s dovish comments

The move comes as traders cut bets on an ECB rate hike in October, with the probability pegged at below 40% ahead of the decision.

Reported · Written up by our desk · Major Pairs

The euro weakened versus the U.S. dollar in early Asian trading on Wednesday, with EUR/USD falling to around 1.3335. FXStreet attributes the decline to a dovish tilt from European Central Bank President Christine Lagarde.

FXStreet reports that Lagarde said rising bond yields could curb economic expansion and limit the pass through of higher energy costs to inflation, and argued the ECB should use a measured response to keep inflation in check. Traders scaled back monetary tightening expectations, with Bloomberg cited as putting the chance of an ECB hike in October at under 40%.

FXStreet also points to stronger expectations for additional Federal Reserve rate hikes as a factor supporting the dollar. The outlet says market participants will watch Friday’s U.S. September jobs data, with economists expecting Nonfarm Payrolls to add 90,000 jobs.

Latest closeEUR/USD 1.137 ▼0.1%

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