Forex - Euro touches days lows after ECB minutes

© Reuters. Euro touches days lows after ECB minutes

Investing.com - The euro extended losses against the dollar on Thursday, slipping to the lowest level in three weeks after the indicated concerns over the strength of the single currency.

touched a low of 1.1662, the weakest since July 27 and was last at 1.1700.

Policymakers believed there was a risk that the euro could "overshoot", the meeting minutes showed, after it rose to two-and-a-half year highs against the dollar in recent months.

“While most of the recent gyrations in prices of financial assets were down to the region’s economic recovery, “concerns were expressed about a possible overshooting in the repricing by … markets, notably the foreign exchange markets, in the future,” the minutes said.

“It was underlined that the still favorable financing conditions could not be taken for granted and relied to a considerable extent on a continued high degree of monetary policy support.”

The minutes cited two factors in the euro's rise, the first being the removal of political risk following the election of Emmanuel Macron as France’s president. The second factor was market expectations over U.S. interest rates.

Last month the ECB held interest rates and asset purchases steady, amid speculation that it will start to scale back its ultra-loose monetary policy in the autumn.

The euro was also lower against the pound, with losing 0.41% to trade at 0.9090, off Wednesday’s 10-month peaks of 0.9142.

The euro had weakened following reports on Wednesday that ECB President Mario Draghi will not deliver any fresh monetary policy message in his speech at the Federal Reserve’s Jackson Hole conference later this month.

Anticipation had been building ahead of the speech, which is due to take place on Aug. 25 amid expectations that Draghi would signal a shift in ECB policy. In his last speech in Jackson Hole in 2014, Draghi laid the groundwork for the ECB's quantitative easing program.

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