Investing.com - The euro fell to the day’s lows on Wednesday after Reuters reported that European Central Bank policymakers are wary of adjusting their policy message in April amid concerns over a potential surge in borrowing costs in the bloc’s periphery.
EUR/USD touched lows of 1.0740, the lowest since March 21 and was last at 1.0754, off 0.55% for the day.
The drop in the single currency came after Reuters reported that an ECB source said the bank’s message at its March 9 meeting has been overinterpreted by markets.
The ECB acknowledged the improving euro zone economy with a tweak of its guidance, removing a reference to being ready to act with all available instruments.
But markets started to price in an interest rate increase in the first quarter of 2018, sparking concerns over a potential bond yield surge in the single currency area.
An increase in borrowing costs, particularly in Italy, Spain and Portugal, where debt payments are high, could cut into spending and create a drag on growth.
Reuters said the ECB was keen to reassure investors that their easy-money policy is far from ending.
The euro was also lower against the pound, with EUR/GBP down 0.29% to 0.8655.
Meanwhile, sterling was slightly lower against the dollar, with GBP/USD slipping 0.2% to 1.2421 after British Prime Minister Theresa May triggered Article 50 of the Lisbon Treaty formally beginning the Brexit process.
Sir Tim Barrow, Britain’s most senior envoy to Brussels delivered official notice to the European council president, Donald Tusk of the UK’s intention to exit the EU, May said.
“In accordance with the wishes of the people, the United Kingdom is leaving the European Union. This is a historic moment from which there can be no turning back,” the prime minister said.