Euro tumbles on ECB rate cut
Currencies Direct May 3rd 2013 - < 1 minute read
The euro dropped sharply against the US dollar on Thursday (May
2nd) after the European Central Bank (ECB) cut eurozone interest
rates by 25 basis points to 0.5 per cent.
EUR/USD tumbled more than one per cent to a session low of
1.3036 as the dollar rose against a basket of major currencies.
The single currency was under intense pressure as ECB president
Mario Draghi said the bank was ready for negative deposit rates and
pointed to downside risks to the economy.
On negative deposit rates, Draghi said the ECB would “stand
ready to act if needed”.
Euro
exchange rate weakness was compounded as the dollar was sent
higher against a basket of currencies by broadly positive economic
data.
The pound erased recent gains after the US Department of Labor
said that the number of individuals filing for initial jobless
benefits had fallen to its lowest level since January 2008.
GBP/USD moved away from a session high of 1.5591 and
subsequently consolidated down 0.16 per cent at 1.5531.
However sterling rose against the euro with EUR/GBP falling 0.63
per cent to 0.8419.
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Currencies Direct