Euro Weakens On Easing Rate Hike Concerns

(RTTNews) - The euro was lower on Tuesday, as comments from European Central Bank officials raised hopes that the central bank is nearing the end of the rate-hiking cycle.

ECB Governing Council member Ignazio Visco said that inflation is expected to fall more quickly than forecast and the chance of a rate hike at each meeting would be based "based on the data".

"For July I think it is a necessity, for anything beyond July it would at most be a possibility but by no means a certainty," ECB Governing Council member Klaas Knot said.

"From July onward I think we have to carefully watch what the data tells us on the distribution of risks surrounding the baseline."

German bond yields fell, with the yield on the 10-year bund reaching 2.37 percent.

The euro fell to 155.27 against the yen and 0.9646 against the franc, off its early highs of 156.14 and 0.9672, respectively. The next possible support for the currency is seen around 151.00 against the yen and 0.95 against the franc.

The euro dropped to 0.8578 against the pound and 1.1227 against the greenback, from an early multi-week high of 0.8607 and a 1-1/2-year high of 1.1275, respectively. The currency may locate support around 0.84 against the pound and 1.10 against the greenback.

The euro eased to 1.6489 against the aussie and 1.4830 against the loonie, off an early multi-week high of 1.6543 and a 2-1/2-month high of 1.4881, respectively. The currency is likely to face support around 1.61 against the aussie and 1.46 against the loonie.

In contrast, the euro rose against the kiwi, touching nearly a 3-week high of 1.7881. The euro is seen finding resistance around the 1.82 level.

Looking ahead, Canada CPI for June, U.S. business inventories for May, NAHB housing market index for July and retail sales and industrial production for June are set for release in the New York session.