Key points:
- Euro slides to three-month bottom
- Exchange rate falls to $1.0810
- ECB cuts interest rates by 0.25%
Old continent’s single currency got smacked once again with the third cut to borrowing costs for the year. It’s red all over the chart.
- The
EURUSD pair floated mostly sideways early Friday after a Thursday event knocked the bullishness out of traders. The euro-dollar pair tumbled to a three-month low of $1.0810 but managed to pare back some of the losses this morning to exchange at around $1.0840. The bearish mood this time was caused by a bold move by the European Central Bank — the third cut to interest rates this year. - The ECB slashed borrowing costs by another quarter point yesterday, bringing the benchmark interest rate that it pays on banks’ deposits to 3.25%. It was the first back-to-back cut in 13 years. What’s more (and dampens the euro outlook), the ECB projects more interest rate chops along the way in efforts to revitalize a sagging European economy. Traders are almost fully pricing in three more reductions through March.
- The single European currency has definitely seen better days. Over the past fourteen trading sessions, the euro has had just two days in the green and has lost over 3.3% of its valuation. Looking ahead, today’s session is expected to be fairly calm on events — no major economic news on deck — leaving room for traders to look at the charts and figure out what the next move might be.
