Euro (€) Currency Thread

inspector_monkfish

FRANKFURT, May 7 - The European Central Bank cut its benchmark interest rate by 25 basis points to a new record low of 1.0 percent on Thursday, as expected.

But the ECB kept its overnight deposit rate, which is acting as a floor for money markets, at 0.25 percent, narrowing the gap between its policy rates instead of cutting the lowest of these to zero.

The ECB also cut its marginal lending rate by 50 basis points to 1.75 percent, from 2.25 percent -- keeping the rate corridor symmetrical. The new rates will take effect on May 13.

All 79 economists polled by Reuters had expected the ECB to cut the main refinancing rate to a new record low of 1.0 percent this month. Euro zone inflation is low and the economy is shrinking fast, although some data have shown signs of improvement.

Analysts and markets are now awaiting President Jean-Claude Trichet's news conference at 1230 GMT, when he is due to announce whether the ECB will use more alternative policy measures to support the economy.

The ECB is tipped to extend the maximum terms for its liquidity operations but could also follow other central banks into direct asset purchases.

Markets are also keen to see whether Trichet will say that 1 percent is the bottom of the current rate cycle and if he signals that the ECB plans to keep rates low for some time

inspector_monkfish

back to 1.1300
waiting for Trichet to start talking at 1.30 BST

wisoli

given Trichet's comments and the BOE announcement today, would it be advisable to take a rate of 1.145 (available for forward buying - delivery late-june), while its still around?! Looking to change thousands rather than hundreds!

Thanks

inspector_monkfish

wisoli wrote: »

given Trichet's comments and the BOE announcement today, would it be advisable to take a rate of 1.145 (available for forward buying - delivery late-june), while its still around?! Looking to change thousands rather than hundreds!

Thanks

your call - i give up !!!


i think this fall is unfairly overdone

BOE announce QE policy - GBP gets battered
ECB announce QE policy - GBP gets battered again !! !!!!!! !!!

inspector_monkfish

1.1220 trading

waynehayes

inspector_monkfish wrote: »

your call - i give up !!!


i think this fall is unfairly overdone

BOE announce QE policy - GBP gets battered
ECB announce QE policy - GBP gets battered again !! !!!!!! !!!

Yep, unbelievable!

Obviously GBP QE is a sign that the economy is in dire straits, while Euro QE is a sign of future stability - duh!!

inspector_monkfish

14:57 07May09 Traders talk of large position adjustment

(GBP) Regarding the sharp moves higher in EUR/GBP and EUR/USD, some traders are
suggesting the move is simply the result of large position adjustment following
the announcement earlier from the BoE of additional QE measures, coupled with
the ECB announcement to buy 'only a limited amount' of EUR denominated covered
bonds.

Loopy_Lobes

I am surprised by the size of the drop in the GBP over the Euro today. This looks way overdone IMHO and I would hope to see a recovery to this mornings levels over the coming week or so.

Having said that if the past few months have been anything to go by we will still play second fiddle to the favoured Euro!!

verona_2

Same old story again. It's gets so far, then bashed straight back down. I give up trying to work it out.

MEMBER02

Dont think it will ever see 1.15