Euro holds above 16-month lows ahead of ECB meeting minutes

Euro climbed in European trade against dollar above 16-month lows hit yesterday on short-covering, ahead of the European Central Bank's meeting minutes, expected to showcase some details on the future of the euro zone's monetary policy.

EUR/USD rose 0.25% to 1.1223, with an intraday low at 1.1195, after closing  down 0.5% yesterday to 16-month lows at 1.1186 following strong US data.

The data bolstered the case for a US rate hike soon in 2022 alongside recent bullish remarks from Fed officials. 

Aside from dollar's strength, euro is conversely under pressure from fading prospects for a 2022 rate hike by the European Central Bank, causing monetary divergence between it and the Fed.

Investors await the European Central Bank's meeting minutes later today to gauge the future of monetary policy in Europe, which will impact euro's levels quite a lot today.