ECB holds rates steady; BofE cuts to 1 percent

ECB holds rates steady; BofE cuts to 1 percent

Story link: ECB holds rates steady; BofE cuts to 1 percent

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The euro declined right after the European Central Bank announced that it will hold interest rates at 2 percent for the time being.

Additionally, ECB President Jean-Claude Trichet hinted that the Bank would not follow the US Federal Reserve in cutting rates to near zero, but he conceded that the Eurozone rate could go lower than 2 percent, raising speculation that there could be another rate cut as soon as March.

Meanwhile, the pound saw gains after the Bank of England’s Monetary Policy Committee decided to cut UK interest rates to 1 percent, a record low, in a move that was widely expected.

In late morning trade in New York, the US dollar traded at $1.2844 to the euro while the yen had weakened to ¥117.0113 to the shared currency, from ¥115.01 to the euro earlier in a general weakening of the Japanese currency that also weakened it to ¥91.105 to the US dollar.

At the same time, the pound traded at 87.55p to the euro while it took $1.4669 to buy a pound and the yen traded at ¥133.6438 to the UK currency.