The euro declined against its major rivals in the European session on Thursday, as investors digested the European Central Bank's decision to raise its key interest rates by 50 basis points, as expected.

The Governing Council, led by Lagarde, raised the main refinancing rate to 3 percent, the deposit facility rate to 2.5 percent and the marginal lending rate to 3.25 percent.

"The Governing Council will stay the course in raising interest rates significantly at a steady pace and in keeping them at levels that are sufficiently restrictive to ensure a timely return of inflation to its 2 percent medium-term target," the central bank for the 20-nation currency bloc said at the opening of its policy statement.

Confirming existing market expectations, the bank said policymakers intends to raise interest rates by another 50 basis points at its next monetary policy meeting in March and it will then evaluate the subsequent path of its monetary policy.

Further, the ECB said that policymakers decided on the terms for reducing the Eurosystem's holdings of securities under the asset purchase program, or APP.

The APP portfolio is set to fall by EUR 15 billion per month on average from the beginning of March until the end of June 2023, as announced in December. The subsequent pace of portfolio reduction will be determined over time, the bank said.

The euro retreated to 1.0885 against the greenback and 0.8877 against the pound, off its early multi-month high of 1.1033 and more than a 4-month high of 0.8955, respectively. The euro is seen finding support around 1.06 against the greenback and 0.86 against the pound.

The euro weakened to near 2-week lows of 0.9934 against the franc and 140.08 against the yen, after rising to 1.0006 and a 3-day high of 141.94, respectively in early deals. The euro is poised to challenge support around 0.97 against the franc and 131.5 against the yen.

The euro fell to 3-day lows of 1.5333 against the aussie and 1.6756 against the kiwi, from its early highs of 1.5440 and 1.6913, respectively. The euro is likely to challenge support around 1.49 against the aussie and 1.62 against the kiwi.

The euro edged down to 1.4515 against the loonie, reversing from an early 8-day high of 1.4642. If the currency slides further, 1.42 is likely seen as its next support level.

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