NEW YORK: The euro raced to a one-week high against the dollar on Thursday, after European Central Bank President Christine Lagarde said that while the ECB is watching the exchange rate, it is not a monetary policy tool. That suggested that the ECB was unlikely to undertake measures to weaken the euro despite its recent gains, giving motivation for traders to further take the single euro zone currency higher.

The ECB also held interest rates steady, as expected. The euro rose as high as $1.1917, a one-week peak, and was last up 0.8% at $1.1903. The euro's high in 2020 was $1.2014, surging more than 6% so far this year. A strong euro though tends to hurt an export-dependent economy like the euro zone, raising concerns from some ECB officials such as chief economist Philip Lane, who said the exchange rate mattered to monetary policy.

"We do not target the exchange rate," Lagarde said during a news conference, adding, however, that the central bank was monitoring the situation. In late morning trading, the dollar index fell 0.4% to 92.837, after hitting a four-week high the previous session. Against the yen, the dollar was little changed at 106.16 yen.