ECB CUTS RATES EURO PLUNGES
The European Central Bank cut interest rates by 0.25% sending the euro plummeting against the US dollar.
The rate decision made by the European Central Bank came as no surprise yesterday but President Mario Draghi implied the possibility of implementing negative deposit rates for commercial lenders. Following the meeting the euro plunged 0.94% against the dollar.
Today Ewald Nowotny, ECB Governing Council member, said that the markets over-interpreted Draghi's comments yesterday, saying that policy makers do not intend to head in that direction. The euro gained 0.2% in response and gained 0.4% on the yen.
Meanwhile, the number of people filing for initial jobless claims fell by 18,000 last week while the US trade deficit narrowed 11%. Later today the country will release nonfarm payrolls and the unemployment rate as well as ISM service sector activity.