EUR falls as USD rises on ECB rate decision

Published: Thursday, 2 May 2013 16:00 BST - Written by Minesh Chaudhari

STORY LINK EUR falls as USD rises on ECB rate decision

The Euro has declined for the first time in five days against the US Dollar after the European Central Bank President Mario Draghi said that policy makers would be open to implementing negative deposit rates.

The Euro briefly made gains against the majority of its peers after the ECB did what the market was expecting and cut its key interest rate to a new record low of 0.5%. It then dropped against all accept one of its peers after the Central Banks President Mario Draghi told a press conference that he was open to further monetary measures such as negative rates. The dollar rose the most in two weeks against the yen after a U.S. report showed the number of Americans filing claims for jobless benefits unexpectedly dropped to a five-year low.

“Our monetary policy will remain accommodative for as long as needed” and officials “will monitor very closely all incoming information” in the months ahead, Draghi said at a press conference after the meeting. He said the ECB will continue to lend banks as much money as they need at least until the middle of 2014.

The US Dollar has strengthened against the majority of its peers after data revealed that the number of Americans filing for unemployment benefit unexpectedly fell to its lowest level in five years and the world largest economies trade deficit shrank by 11%. In a report, the U.S. Department of Labour said the number of individuals filing for initial jobless benefits in the week ending April 26 fell by 18,000 to a seasonally adjusted 324,000, compared to expectations for an increase of 3,000 to 345,000.

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