Euro Appreciates Amid Hawkish Comments From ECB's Knot

(RTTNews) - The euro was higher against its major counterparts during the European session on Wednesday, as European Central Bank Governing Council member Klaas Knot remarked that markets may be misreading the possibility of an interest rate hike at the monetary policy meeting next week.

In an interview with Bloomberg, Knot said that markets could be misjudging the chance of the rate hike next week.

"I continue to think that hitting our inflation target of 2% at the end of 2025 is the bare minimum we have to deliver," Knot added.

Preliminary data from Destatis showed that German factory orders plunged in July, largely due to a big order for air and spacecraft in the previous month.

Factory orders fell a calendar-and-seasonally adjusted 11.7 percent in July, which was much worse than the 4 percent slump economists had forecast.

The euro rose to 1.0747 against the greenback and 0.8558 against the pound, from its early lows of 1.0713 and 0.8526, respectively. The currency is seen facing resistance around 1.09 against the greenback and 0.87 against the pound.

The euro climbed to 1.4674 against the loonie and 158.44 against the yen, reversing from a previous low of 1.4610 and a 2-day low of 157.76, respectively. Next key resistance for the currency may be located around 1.48 against the loonie and 159.00 against the yen.

The euro recovered to 1.8259 against the kiwi and 1.6834 against the aussie, off its early lows of 1.8181 and 1.6759, respectively. The currency may challenge resistance around 1.84 against the kiwi and 1.70 against the aussie.

The euro touched 0.9557 against the franc, setting a 5-day high. On the upside, 0.98 is possibly seen as its next resistance level.

Looking ahead, U.S. and Canadian trade data for July and ISM non-manufacturing PMI for August and the Fed Beige book report will be released in the New York session.

The Bank of Canada will announce its interest rate decision at 10:00 am ET. The BoC is widely expected to keep its policy rate steady at 5 percent.