European Session – Euro tumbles after surprise ECB rate cut
November 7, 2013 1:38 pm
The European session was dull for the most part until the Bank of England and European Central Bank policy decisions. These were the biggest risk events today, and most market participants preferred to wait on the sidelines until the announcements were made, which kept most major currency pairs locked in trading ranges before breaking out after the news.
The euro made the biggest move, tumbling hard against the dollar and the yen after a surprise move by the ECB which cut the benchmark interest rate by 25 basis points to 0.25%. Focus will be on ECB President Mario Draghi’s press conference, to see what was the justification for bringing rates to a record low. The most likely the reason would be softening inflation in the Eurozone, which has fallen below the ECB target rate.
The euro tumbled out of its 20-pip trading range after the ECB news, to fall 1.13% against the dollar, ending at 1.3370. Against the yen, the euro lost 1% to 132.03.
Meanwhile, the Bank of England left monetary policy unchanged as was expected. The benchmark rate was left at 0.50% while the asset purchase program was on hold at GBP375 billion.
Sterling fell to a session low of 1.6017 before ending at 1.6042, with a 0.22% loss. Against the euro, the pound performed better, with EURGBP falling 0.92% to 0.8332.
The dollar rose against the yen, up 0.11% to end at 98.74. US GDP data as well as US jobless claims will be in focus in the upcoming US session. Also, Friday’s nonfarm payrolls will likely cause big moves for this pair.
The European session was dull for the most part until the Bank of England and European Central Bank policy decisions. These were the biggest risk events today, and most market participants preferred to wait on the sidelines until the announcements were made, which kept most major currency pairs locked in trading ranges before breaking out after the news.
The euro made the biggest move, tumbling hard against the dollar and the yen after a surprise move by the ECB which cut the benchmark interest rate by 25 basis points to 0.25%. Focus will be on ECB President Mario Draghi’s press conference, to see what was the justification for bringing rates to a record low. The most likely the reason would be softening inflation in the Eurozone, which has fallen below the ECB target rate.
The euro tumbled out of its 20-pip trading range after the ECB news, to fall 1.13% against the dollar, ending at 1.3370. Against the yen, the euro lost 1% to 132.03.
Meanwhile, the Bank of England left monetary policy unchanged as was expected. The benchmark rate was left at 0.50% while the asset purchase program was on hold at GBP375 billion.
Sterling fell to a session low of 1.6017 before ending at 1.6042, with a 0.22% loss. Against the euro, the pound performed better, with EURGBP falling 0.92% to 0.8332.
The dollar rose against the yen, up 0.11% to end at 98.74. US GDP data as well as US jobless claims will be in focus in the upcoming US session. Also, Friday’s nonfarm payrolls will likely cause big moves for this pair.
Related Posts: