LONDON, Jan 23 (Reuters) - The euro fell to a six-week low and German bond yields dropped to their lowest in two weeks on Thursday after European Central Bank President Christine Lagarde struck a slightly more dovish tone than some had expected in her press conference.
The euro zone banks index initially extended gains as Lagarde spoke before going into reverse. It was last down 0.2% at the day’s low.
The euro dropped to $1.1059, down 0.3% and its weakest since Dec. 9 while Germany’s 10-year bond yield fell to -0.29%, 3 basis points lower on the day.
“Perhaps there was an expectation that they would be more upbeat on the economy,” said Antoine Bouvet, senior rates strategist at ING, noting that Lagarde had “declined on a few occasions to distance herself from negative interest rates.”
Reporting by Dhara Ranasinge, Tommy Reggiori Wilkes and Thyagaraju Adinarayan; editing by Sujata Rao