Euro extends gains after Christine Lagarde's remarks

Euro rose in European trade against dollar for another session following remarks by ECB President Christine Lagarde ahead of Parliament. 

The greenback is extending its decline off 20-year highs against major rivals on active profit-taking ahead of Fed Chair Jerome Powell's Congressional testimony.

EUR/USD rose 0.6% today to 1.0578, after rising 0.2% yesterday, the fourth profit in five days.

Lagarde

ECB President Christine Lagarde said the ECB doesn't expect a recession in the euro zone but must take precautions against it.

Lagarde pointed to the Ukrainian crisis as the ongoing cause for inflation, and asserted the central bank must work to coordinate monetary policies better in European countries.

European Rates

Now markets fully expect the ECB to hike rates by 25 basis points in July, and by a similar amount in September.

The Dollar

The dollar index fell 0.5% on Tuesday for another session on profit-taking off 20-year highs against major rivals. 

The dollar lost ground amid doubts the Fed might ever hike rates by 75 basis points once more this year.

Markets also await Fed Chair Jerome Powell's Congressional testimony this week to gather more clues on the future of monetary policy.