Euro Faces Difficulty in Staying Above $1.14

The euro fell for the second day in a row on Tuesday after European Central Bank President Christine Lagarde said that there is no need for significant monetary tightening in the eurozone.

Bond yields rose, and the euro recorded its highest weekly performance since March 2020 last week, when the European Central opened the door to raising interest rates later this year and said its meeting on March 10 will be crucial in determining the pace of ending its bond purchase plan.

The European Central’s tightening surprised markets and pushed bond yields in the European peripheral countries, especially Italy, to rise on Monday, as investors were concerned about the impact of tightening monetary policy faster than expected on the debt-heavy countries’ bonds.

But on Monday, Lagarde gave a less hawkish stance, saying inflation was unlikely to continue rising, pushing the euro lower.

In early trading on Tuesday, the euro fell 0.3 percent, struggling to stay above the $1.14 level.

The dollar index rose 0.3 to 95.67.

There was little change in the Australian dollar, which recorded $0.7127.

The cryptocurrency Bitcoin broke its 50-day average price to top $44,000 for the first time in a month on Tuesday.