Euro extends gains after Lagarde's bullish remarks

Euro rose in European trade for another session against dollar, continuing its solid performance after bullish remarks by ECB President Christine Lagarde.

The dollar on the other hand is facing  pressures as risk appetite improves in the market, especially with China.

EUR/USD rose over 0.4% on Tuesday to 1.0736, the highest since April 25, with a session-low at 1.0660.

Euro rose 1.2% yesterday against dollar, the biggest profit since March 9 after bullish remarks by Lagarde.

Lagarde 

ECB President Lagarde said she expects bonds purchases to wrap up early in the third quarter, allowing for a rate hike in July.

She noted the importance of responding to the current record inflation, and bring rates back from the current negative territories. 

Dollar

The dollar index slipped 0.35% on Tuesday for a second session to a month low at 101.74 against major rivals.

Risk appetite improved as China loosens up restrictions as Covid 19 infections decline, while investors have completely priced in future US rate hikes with the dollar.

Estimates

Now analysts expect euro to rebound strongly to 1.08 in the next three months, and potentially hit 1.1 throughout the next year.