Euro Falls As ECB Lagarde Signals Pause In September

(RTTNews) - The euro weakened against its most major counterparts in the New York session on Thursday, after European Central Bank President Christine Lagarde said that the central bank may pause rate hike in September.

During the news conference, Lagarde said that the economic outlook for the euro area has deteriorated and would remain weak in the short run.

The ECB chief refrained from committing to future rate increases, saying that a hike or a pause is possible in September.

"We have an open mind as to what the decisions will be in September and in subsequent meetings," Lagarde added.

The ECB increased the main refinancing rate, or refi, by 25 basis points to 4.25 percent.

The deposit facility rate was hiked to 3.75 percent and the lending rate to 4.50 percent.

The future decisions will ensure that the key interest rates will be set at sufficiently restrictive levels for as long as necessary to achieve a timely return of inflation to the 2 percent medium-term target, the ECB said.

The ECB reiterated that it would continue to follow a data-dependent approach in determining the appropriate level and duration of the restriction.

The euro declined to more than a 2-week low of 1.0983 against the greenback, from a 1-week high of 1.1149 seen at 6:15 am ET. The pair was worth 1.1085 when it closed deals on Wednesday. The euro is seen finding support around the 1.07 mark.

The euro dropped to near a 2-week low of 0.8544 against the pound, after rising to a 2-day high of 0.8599 at 6:30 am ET. The euro-pound pair had ended yesterday's trading session at 0.8566. Next key support for the euro is likely seen around the 0.84 level.

The euro weakened to near a 2-week low of 154.79 against the yen, down from a 2-day high of 156.23 set at 7 am ET. The pair had closed Wednesday's deals at 155.39. The euro is likely to face support around the 149.00 region, if it falls again.

The euro touched a 10-day low of 1.7686 against the kiwi, following a 2-day high of 1.7860 it logged at 6:05 am ET. At yesterday's trading close, the pair was quoted at 1.7843. The euro is poised to challenge support around the 1.74 mark.

The euro depreciated to a 3-week low of 1.4489 against the loonie, reversing from a 3-day high of 1.4701 hit at 6:15 am ET. The euro was trading at 1.4640 against the loonie at yesterday's close. Should the euro falls further, it is likely to test support around the 1.43 region.

The euro pulled back to 1.6284 against the aussie from yesterday's close of 1.6400. Further downtrend may take the euro to a support around the 1.57 area.

In contrast, the euro rebounded to 0.9556 against the franc, from near a 1-year low of 0.9522 it touched at 9:15 am ET. Next near term resistance for the currency is likely seen around the 1.00 level.