The euro weakened against the U.S. dollar and the Japanese yen on Monday after the European Central Bank President Mario Dragi signaled that the central bank's interest rates would remain at present or lower levels for an extended period of time.
While speaking at a conference, Draghi told that the European economy remains fragile and unemployment is still too high.
"Given the overall subdued outlook for inflation extending into the medium term, the ECB's Governing Council expects the key ECB interest rates to remain at present or lower levels for an extended period of time," he added.
Draghi said that the average public debt level in the euro area is still very high, at around 95% of GDP, which means that consolidation efforts need to be maintained in coming years.
Retreating from near 3-week high of 1.3382 against the greenback, the euro reached 1.3342, lowest since August 29. The euro may find support around the 1.328 area.
The euro fell back to 131.88 against the yen amid Drahi's speech, from an early high of 132.40. If the euro falls further, its next possible support is seen at the 131.00 level.
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Forex News
May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.