LONDON, July 4: The euro hit a one-week low versus the dollar on Friday, deflated after the European Central Bank signalled it wasn’t planning another rate rise and as US jobs data did not deliver a big downside surprise.

The ECB raised euro area borrowing costs by a widely anticipated quarter percentage-point to 4.25 per cent on Thursday, but President Jean-Claude Trichet avoided any code words associated with more tightening, saying he had no bias.

Taken with the US non-farm payrolls report, which was in line with expectations despite speculation about risks to the downside, Trichet’s tone helped to knock the euro two US cents off two-month highs.

Several ECB policymakers reiterated Trichet’s stance on Friday, including Governing Council member Axel Weber.

A Reuters’ poll taken after Trichet’s speech showed a median 30 per cent chance of another ECB rise this year.

“We’re in the camp that thinks there won’t be any further rate hikes from the ECB this year, so we think we’ve seen the high of euro/dollar,” said Niels Christensen, FX strategist at Nordea in Copenhagen.

The ECB, like other several other central banks, has the twin difficulties of rising inflation and slowing growth, but Christensen said the euro might falter due to the growth scenario.

The euro was last flat at $1.5690 after dropping to a one-week low of $1.5654 earlier.

The dollar was down 0.1 per cent at 106.62 yen, but hit a one-week high versus a basket of six major currencies at 72.849.

Some analysts said it may be too early to call the end of the euro’s bull-run even though the single currency zone’s soft spot spots are spreading as slowing US growth is likely to keep the Federal Reserve from raising rates for a while.

Next week’s focus will be the G8 summit and whether the leaders will send a message strong enough to reverse the course of record high oil prices and the dollar’s overall slide, analysts said.

—Reuters