The euro depreciated against its major rivals in the European session on Wednesday, as investors awaited monetary policy decision from the European Central Bank for more hints on tapering of emergency stimulus measures.

Solid economic growth and a surge in inflation fueled hopes that policymakers could start a discussion on changes to its bond purchases sooner rather than later.

European Central Bank policymaker Robert Holzmann told Eurofi Magazine that the central bank is likely to normalize monetary policy quicker than market expectations amid rising inflationary risks.

Holzmann said that there are chances for upward price pressures from persisting global supply bottlenecks, labor shortages, the pent-up household demand, the cost effects of climate change policies, and higher headline inflation getting entrenched into inflation expectations.

European markets fell as a resurgence in Delta virus cases raised concerns about a slowdown in global economic growth.

The euro declined to a 1-week low of 1.1812 against the greenback and a 6-day low of 130.18 against the yen, off its prior high of 1.1851 and a 5-day high of 130.70, respectively. The euro may find support around 1.16 against the greenback and 128.5 against the yen.

The euro edged down to 1.0865 against the franc, after hitting 1.0892 for the first time since July 8. On the downside, 1.06 is likely seen as its next support level.

The euro pulled back to 0.8584 against the pound, from a high of 0.8603 seen at 3:25 am ET. If the currency drops further, 0.84 is seen as its next support level.

The European currency retreated to 1.6631 against the kiwi, 1.6016 against the aussie and 1.4969 against the loonie, after rising to 1.6702, 6-day high of 1.6086 and near a 3-week high of 1.5020, respectively in early trades. If the euro drops further, 1.65, 1.56 and 1.48 are likely seen as its next support levels against the kiwi, the aussie and the loonie, respectively.

Looking ahead, the Bank of Canada will announce its interest rate decision at 10:00 am ET. The BoC is widely expected to keep its policy rate steady at 0.25 percent.

Canada Ivey PMI for August and U.S. consumer credit for July will be featured in the New York session.

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