By Gertrude Chavez-Dreyfuss and Chibuike Oguh
NEW YORK (Reuters) - The euro rose against the dollar on Thursday after the European Central Bank lowered interest rates and ECB president Christine Lagarde dampened expectations for another cut next month, saying the bank will let economic data dictate the next policy move.
"We are going to decide meeting by meeting," Lagarde said in a briefing after the ECB eased again on Thursday by 25 basis points (bps) amid slowing inflation and economic growth.
"I'm not giving you any commitment of any kind as far as that particular date is concerned and our path is not predetermined at all."
The ECB lowered its deposit rate to 3.5%, as widely expected. The refinancing rate, however, was cut by a much bigger 60 bps to 3.65% in a long-flagged technical adjustment.
Rate futures have pared back bets of an October rate cut to just more than seven bps from 10 bps just before Lagarde spoke, according to LSEG calculations.
"Looking ahead, the path for interest rates remains uncertain," said Yael Selfin, chief economist at KPMG in the UK.
"While there is widespread consensus on the Governing Council that policy restrictiveness should be eased, divergent views remain around the pace of cuts."
She expects further easing in December that would take the deposit rate down to 3.25%. If the euro zone outlook weakens further, Selfin sees ECB policymakers increasing the pace of cuts next year towards a terminal rate of around 2.25%.
The euro was last up 0.37% at $1.105, but down 0.5% so far this week.
Against the yen, the euro rose about 0.2% to 157.145 yen.
The U.S. dollar index fell 0.41% to 101.36 , driven partly by gains in the euro, the largest component of the index.
Against the yen, the dollar eased 0.2% on the day to 142.07 , after gaining 0.2% so far this week.
"Lagarde kind of delivered what was expected at the ECB," said Steve Englander, head of Global G10 FX Research at Standard Chartered in New York.
"Overall, the market has a bit of risk appetite and they're buying currencies that they sold before - which often is an indication that risk appetite is restored."
Mixed U.S. economic data released on Thursday cemented expectations of a 25-bps cut next week by the Federal Reserve.
U.S. initial jobless claims rose 2,000 to a seasonally adjusted 230,000 for the week ended Sept. 7, in line with expectations.
U.S. August producer prices increased a slightly-more-than-expected 0.2% as services costs rose, but the trend remained consistent with ebbing inflation. Data for July was revised lower to show the producer price index unchanged instead of edging up 0.1% as previously reported.