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FOREX-Euro gains as ECB's Lagarde says not targeting exchange rate

    * ECB's Lagarde more hawkish than expected -analyst
    * Euro rises to one-week high vs dollar
    * ECB lifts growth forecast
    * U.S. jobless claims worse than expected; dollar slips
    * Graphic: World FX rates in 2020

 (New throughout, updates prices, market activity and comments; new byline, changes dateline; previous
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Sept 10 (Reuters) - 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.
    "Our mandate is price stability, and clearly to the extent that appreciation of the euro exercises
negative pressure on prices, we have to monitor carefully such a matter," she explained.
    But just as Lagarde was starting her press conference, Bloomberg news came out with a report, citing
ECB sources, saying there was no need to overreact to the euro's gains.
    Traders said the Bloomberg report caused a spike in the euro.
    "The official statement suggests the ECB is watching the exchange rate because of its impact on
inflation, which is pretty standard," said Ranko Berich, head of market analysis, at Monex Europe in
    "But as Lagarde said, the exchange rate is not a policy call. The Bloomberg report was much clearer
than the statement," Berich said.
    The ECB also raised the growth forecast for this year, although projections for next year and 2022
remained little changed. The new forecast predicts a contraction of -8.0% in 2020, compared with its
previous estimate of a -8.7% fall. 
    "At the margin, the ECB comments and the press conference were slightly hawkish than expected," Berich
    In late morning trading, the dollar index fell 0.4% to 92.837, after hitting a four-week high
the previous session.
    The dollar slipped after data showed initial claims for state unemployment benefits totaled a
seasonally adjusted 884,000 for the week ended Sept. 5, matching the number of applications received in
the prior week, the Labor Department said on Thursday. Economists polled by Reuters had forecast 846,000
applications in the latest week.
    U.S. producer prices were also better than expected, with gains of 0.3% for the headline and 0.4% for
the core figure.
    Against the yen, the dollar was little changed at 106.16 yen.
    Currency bid prices at 10:40AM (1440 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1894        $1.1802     +0.78%         +6.10%      +1.1916     +1.1801
 Dollar/Yen       JPY=        106.1600       106.1700    -0.01%         -2.48%      +106.2900   +105.9900
 Euro/Yen         EURJPY=     126.28         125.31      +0.77%         +3.55%      +126.4500   +125.3100
 Dollar/Swiss     CHF=        0.9062         0.9123      -0.67%         -6.37%      +0.9132     +0.9050
 Sterling/Dollar  GBP=        1.2908         1.3000      -0.71%         -2.65%      +1.3034     +1.2909
 Dollar/Canadian  CAD=        1.3152         1.3141      +0.08%         +1.28%      +1.3168     +1.3118
 Australian/Doll  AUD=        0.7299         0.7282      +0.23%         +3.96%      +0.7324     +0.7263
 Euro/Swiss       EURCHF=     1.0779         1.0767      +0.11%         -0.67%      +1.0787     +1.0751
 Euro/Sterling    EURGBP=     0.9213         0.9077      +1.50%         +8.98%      +0.9216     +0.9076
 NZ               NZD=        0.6683         0.6681      +0.03%         -0.79%      +0.6707     +0.6667
 Dollar/Norway    NOK=        8.9622         9.0158      -0.59%         +2.09%      +9.0474     +8.9290
 Euro/Norway      EURNOK=     10.6620        10.6440     +0.17%         +8.38%      +10.7088    +10.6211
 Dollar/Sweden    SEK=        8.7166         8.7424      +0.47%         -6.78%      +8.7629     +8.6863
 Euro/Sweden      EURSEK=     10.3701        10.3217     +0.47%         -0.95%      +10.3910    +10.3206
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by David Gregorio)