Euro Broadly Lower as ECB Official Says Key Rate Might Reduce | IFCM
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Euro Broadly Lower as ECB Official Says Key Rate Might Reduce - 18.4.2013

The single currency depreciated broadly yesterday evening as there were reports for decreasing ECB interest rates in case the Euro area economy weakens further. Specifically, ECB governing council member and president of Bundesbank, Jens Weidmann said that key interest rate could be lowered if economic data suggest that. Recent EZ ZEW Economic Sentiment in April was unexpectedly weaker and much lower than prior month, grounding a possibility of ECB rate cut, key interest rate is currently at 0.75% and was lastly changed from 1% to 0.75% in July meeting. The EURUSD plummeted from 1.3198 to psychological support at 1.30 unable to hold its ground amid a potential rate cut, losing 1.5% in less than 10 hours. The euro against the Japanese Yen also declined from 129.67 to 126.56 and the EURGBP sank to support at 0.8533 from recent peak at 0.8625.



The British pound was also sluggish as the Claimant count yesterday dropped by 7K in March down from revised -5.3K in February, while it was expected to remain unchanged. In addition, the meeting minutes of BOE revealed that though monetary policy remained steady the Governor pushed to increase asset purchase size to £400B. Following that the GBPUSD dropped from 1.5378 to two weeks low at 1.5217. Looking ahead investors focus today on UK Retail Sales, US Jobless Claims and US Philadelphia Manufacturing Index.
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