ECB Policymaker's Cautious Tone Weighs on Euro

The euro slipped after comments from ECB policymaker Isabel Schnabel failed to provide clear indications on whether the central bank will raise rates in September. Schnabel acknowledged weaker-than-predicted euro zone growth but did not rule out the need for more rate hikes. The cautious tone from the influential hawk on the Governing Council put downward pressure on the euro. Traders now see a 60% chance that the ECB will maintain its current interest rate in September. The US dollar, which had gained on expectations of higher interest rates, eased this week due to signs of cooling US spending and hiring. The dollar index is up 1.4% for August but has fallen 0.8% this week.