The Dollar hit a new one-month low on Tuesday, whilst the Euro’s gains continued, as a stock market selloff didn’t bolster the greenback’s safe haven appeal.

The Dollar index – measuring the currency against six rivals, declined 0.3% to 101.79, the lowest level since 26th April.

The single currency’s gains were extended following comments by president of the European Central Bank, Christine Lagarde signalling negative interest rates will likely be gone by the end of summer, Reuters reports.

The Euro rose 0.4% to $1.0729 in early Tuesday trading as traders reduced some short bets after the ECB president said rates would potentially be in positive territory by the end of Q3.

"We're moving very likely into positive territory at the end of the third quarter," Lagarde said during an interview with Bloomberg TV. She added: "When you're out of negative (rates) you can be at zero, you can be slightly above zero. This is something that we will determine on the basis of our projections and ... forward guidance."

According to a note by Commerzbank strategists: "Many observers will continue to consider the ECB as being too hesitant, but the fact that a lift-off is now very likely to happen in July and that the ECB seems willing to hike rates further after that is positive for the Euro.”

Earlier in the month the Euro fell to a January 2017 low of $1.0349, yet went on to rally by 3.6% since then in seven trading sessions.

Elsewhere, the Australian Dollar fell 0.41% to $0.70815 on Tuesday, whilst the New Zealand Dollar was 0.46% down at $0.6438. This came a day before New Zealand’s central bank is forecast to hike the key rate by half a point.

In addition, stock markets fell, with U.S. stock futures dropping by more than 2%, the Reuters report adds.

Trading remained volatile, with a currency market volatility index reading 9.6%, not too far away from a two-year top over 10.5% reached earlier in May.