Euro Higher As ECB Lagarde Says Inflation Remains Persistent

(RTTNews) - The euro climbed against its major counterparts during the European session on Tuesday, as European Central Bank President Christine Lagarde remarked that inflation in the region remained too high and the central bank cannot declare victory at present.

"Inflation in the euro area is too high and is set to remain so for too long. But the nature of the inflation challenge in the euro area is changing," Lagarde said in a speech at an ECB forum in Sintra, Portugal.

"This persistence is caused by the fact that inflation is working its way through the economy in phases, as different economic agents try to pass the costs on to each other."

Without any material change to the euro area outlook, the bank will continue to increase rates in July, Lagarde reiterated.

"We have made significant progress but - faced with a more persistent inflation process - we cannot waver, and we cannot declare victory yet."

The ECB is determined to bring rates to "sufficiently restrictive" levels and keep them there "for as long as necessary," Lagarde added.

The euro advanced to 4-day highs of 1.0943 against the greenback, 0.9791 against the franc and 0.8594 against the pound, from its early lows of 1.0901, 0.9749 and 0.8567, respectively. The currency is seen finding resistance around 1.11 against the greenback, 1.00 against the franc and 0.88 against the pound.

The euro touched 157.27 against the yen, setting a multi-year high. If the euro extends rise, 160.00 is possibly seen as its next resistance level.

The euro rose to 1.4374 against the loonie, 1.7724 against the kiwi and 1.6358 against the aussie, off an early low of 1.4328, 1-week low of 1.7636 and a 4-day low of 1.6257, respectively. The currency may find resistance around 1.46 against the loonie, 1.80 against the kiwi and 1.66 against the aussie.

Looking ahead, U.S. final building permits for May, durable goods orders for May, U.S. S/P Case-shiller house price index for April and consumer confidence index for June and Canada inflation data for May are due to be released in the New York session.