Euro dips as markets manage expectations of ECB rate hikes



* Euro holds below $1.06 following Lagarde comments

* Investors watching ECB annual forum in Sintra

* Markets on lookout for euro zone price data this week

By Hannah Lang

WASHINGTON, June 28 (Reuters) - The dollar climbed on Tuesday while the euro faltered after European Central Bank (ECB) President Christine Lagarde offered no fresh insight into the central bank's policy outlook.

The ECB is widely expected to follow its global peers by raising interest rates in July to try to check soaring inflation though economists are divided on the magnitude of any rate hike.

The euro held below $1.06 after Lagarde said the central bank would move gradually but with the option to act decisively on any deterioration in medium-term inflation, especially if there were signs of a de-anchoring of inflation expectations.

The euro was last down 0.6% to $1.052.

"The ECB is in a tough spot because it is expected to see more significant slowing than a lot of its peers," said Mazen Issa, senior FX strategist at TD Securities in New York.

"There's an inherent limitation to how much the ECB is going to be able to do, particularly in the relative sense to, say, the Fed," Issa added, pointing to Russia's invasion of Ukraine and the fragmentation risk in the euro zone.

Money markets are pricing in about 238 basis points (bps) of cumulative rate hikes by mid-2023 compared to the around 280 bps they anticipated two weeks ago.

The U.S. dollar index =USD , which struck a two-decade high of 105.79 this month, was last up 0.51% at 104.490.

"If there was an overall theme, it's still that the dollar is stronger during this period of uncertainty and I expect the uncertainty to continue for at least the summer until we get a better idea of what inflation looks like," said Marvin Loh, senior global macro strategist at State Street.

New York Federal Reserve Bank President John Williams on Tuesday in an interview on CNBC said interest rates "definitely" needed to be between 3% and 3.5% by the end of this year, but that he did not anticipate a U.S. recession.

Elsewhere, the offshore Chinese yuan CNH=EBS moved higher after China reduced COVID-19 pandemic-related quarantine for international travelers.

In crytocurrencies, bitcoin BTC= last fell 2.96% to $20,278.95. It fell to as low as $17,588.88 earlier this month.

Ethereum ETH= ETH=BTSP last fell 3.52% to $1,159.35.

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Currency bid prices at 3:15PM (1915 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Dollar index

=USD

104.4900

103.9700

+0.51%

9.227%

+104.6100 +103.7500 Euro/Dollar

EUR=EBS

$1.0521

$1.0583

-0.57%

-7.44%

+$1.0606

+$1.0503 Dollar/Yen

JPY=EBS

136.2450

135.4800

+0.57%

+18.36%

+136.3800 +135.1200 Euro/Yen

EURJPY=

143.36

143.35

+0.01%

+10.01%

+144.2700 +142.8700 Dollar/Swiss

CHF=EBS

0.9571

0.9562

+0.13%

+4.96%

+0.9586

+0.9535 Sterling/Dollar GBP=D3

$1.2181

$1.2265

-0.68%

-9.93%

+$1.2291

+$1.2181 Dollar/Canadian CAD=D3

1.2876

1.2872

+0.03%

+1.84%

+1.2894

+1.2820 Aussie/Dollar

AUD=D3

$0.6908

$0.6925

-0.25%

-4.97%

+$0.6965

+$0.6907 Euro/Swiss

EURCHF=

1.0071

1.0121

-0.49%

-2.87%

+1.0131

+1.0057 Euro/Sterling

EURGBP=

0.8638

0.8626

+0.14%

+2.83%

+0.8646

+0.8612 NZ

NZD=D3

$0.6239

$0.6302

-0.92%

-8.78%

+$0.6313

+$0.6239 Dollar/Dollar

Dollar/Norway

NOK=D3

9.8310

9.7985

+0.37%

+11.64%

+9.8420

+9.7425 Euro/Norway

EURNOK=

10.3453

10.3608

-0.15%

+3.32%

+10.3777

+10.3068 Dollar/Sweden

SEK=

10.1510

10.0692

+0.17%

+12.57%

+10.1551

+10.0390 Euro/Sweden

EURSEK=

10.6807

10.6631

+0.17%

+4.36%

+10.6883

+10.6341



World FX rates Link
King dollar G10 FX Link



Reporting by Hannah Lang in Washington; additional reporting by Saikat Chatterjee in London; editing by
Jason Neely, Will Dunham, Chizu Nomiyama and Barbara Lewis

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