The euro rose in the European market on Monday against a basket of global currencies, as part of attempts to recover from its lowest level in ten weeks against the US dollar, about to achieve its first gain in the last three days, after comments by European Central Bank President Christine Lagarde at the Jackson Hole Forum.

Lagarde said that the bank will maintain tightening monetary policy and raise interest rates to reduce inflation from high to the target of 2%, which boosted the prospects of raising European interest rates by about 25 basis points during the next September meeting.

Euro exchange rate today

The euro rose against the dollar by 0.2% to $1.0818, from the opening price of trading at $1.0795, and recorded the lowest level today at $1.0792.

On Friday, the euro lost 0.15% against the dollar, its second consecutive daily loss, and hit a ten-week low of $1.0766.

In terms of trading last week, the euro lost 0.7% against the dollar, in the sixth consecutive weekly loss, among the longest weekly losing streak since April 2018.

These losses are attributed to fears that the European economy is rapidly approaching recession, which threatens to stop the path of monetary tightening by the European Central Bank and the slowdown in raising European interest rates.

Christine Lagarde

European Central Bank President Christine Lagarde said at the Jackson Hole Forum on Friday that the central bank will set interest rates as high as needed and will leave them there as long as it takes inflation to return to the 2% target over the medium term.

Lagarde added, it is important for central banks to provide support to economies and ensure price stability in line with their respective mandates, because larger price fluctuations do not creep into inflation in the medium term through wages that frequently chase prices.

Lagarde said that if global supply becomes less elastic, including in the labor market, and global competition decreases, we should expect prices to play a larger role in adjustment.

If we also face larger and more common shocks such as energy shocks and geopolitical shocks, we can see companies experience cost increases more consistently, Lagarde said.