The dollar and the euro were moving in different directions Friday after the European Central Bank signaled it might not cut interest rates as much as previously thought this year amid rising economic uncertainty.
The euro climbed 0.7% to just under $1.09. The WSJ Dollar Index, which tracks the greenback against 16 other currencies, slid 0.3%. The moves came after ECB lowered interest rates by a quarter of a point as expected on Thursday.
But President Christine Lagarde warned that the economic landscape was currently “clouded with uncertainty,” which the market took as a sign that it might not cut much further. That would be a good outcome for the euro–when rates stay elevated, that tends to boost currencies by making them more appealing to investors seeking higher yields.
