President Christine Lagarde said earlier in the day that the policy rate was likely to be positive at the end of the third quarter and provided a boost to the shared currency. This comment suggests that the ECB could opt for a 50 basis points rate hike in September after going for a 25 bps rate hike in July. In fact, Bloomberg claimed in a recently published report that some ECB policymakers were annoyed that ECB President Lagarde planning to rule out double-does rate increases.
Meanwhile, the souring market mood helps the dollar limit its losses on Tuesday and caps EUR/USD's upside for the time being. The Euro Stoxx 600 Index is down nearly 1% on the day and USBeijing's decision to extend the work-from-home order and escalating US-China tensions with regard to Taiwan and trade relations seem to be causing investors to stay away from risk-sensitive assets.
On the downside, 1.0700 aligns as first support. If buyers manage to defend this level, the pair could regain its traction and test 1.0740 before targeting 1.0780 and 1.0800 . Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements.
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