Euro lower as ECB cuts interest rates

Story link: Euro lower as ECB cuts interest rates

The euro weakened versus the US dollar and the Japanese yen Thursday after the European Central Bank cut interest rates and hinted that more cuts may be in the cards.

The ECB cut rates by half a percentage point, as expected, to 2 percent.

The shared currency gained slightly on a hint that there might be no rate cut in February, but it fell again when ECB President Jean-Claude Trichet continued on to say that there in no guarantee that the Bank will not make more rate moves.

Mr. Trichet’s comments indicated that another rate cut could well come in March.

Despite today’s cut, the Eurozone interest rate remains among the highest among those in the industrialized world, with the UK rate at 1.5 percent and the US rate in a range between 0 and 0.25 percent.

In afternoon trade in New York, it took $1.313 to buy a euro, while at the same time the yen traded at ¥117.9031 to the euro and at ¥89.795 to the greenback.