The Euro has taken heavy losses against all of its most traded peers after the European Central Bank announced that it had cut interest rates to a new record low of 0.25%.
Policy makers announced that the rate was cut in an effort to tackle the impacts of a decline in inflation which slumped to its slowest pace in four years and in an effort to try and bolster the Eurozone’s flagging economic recovery.
Today’s decision now means that the Central Bank only has one more opportunity to cut interest rates before reaching the zero level. The news caused investors to ditch the single currency in favour of other currencies such as the Pound and US Dollar.
Expectations that the Bank will opt to introduce unconventional tolls such as monetary easing or a negative rate have increased as a result further spooking the markets.
“The rate cut leaves the ECB in an uncomfortable position. The only easy solution left would be for the ECB to signal that it will stay in ‘full-allotment mode’ even after July 2014, the commitment it has given so far,” said the cheif European economist at UBS AG.
The ECB’s decision to cut rates took many analysts by complete surprise and as per usual when something unexpected happens in the markets then panic selling often ensues.
ECB President Mario Draghi was to speak at the bank’s post-policy meeting press conference later in the session.
Current Euro (EUR) Exchange Rates
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3367
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8328
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4076
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.5965
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7477
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1999
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7099
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6271
(Correct as of 13:10pm GMT)
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