The euro fell against the US dollar on Friday, and has continued falling this morning to reach its lowest point since mid-March, in anticipation of another interest rate cut from the European Central Bank on May 7. The ECB is expected to cut interest rates by a quarter point as well as possibly announcing quantitative easing measures in order to combat the recession.
Comments from ECB President Jean-Claude Trichet reported in the Japanese media over the weekend helped push the euro below $1.3000 for the first time in five weeks. There was a lack of clarity regarding Trichet’s comments during a speech in Tokyo, with concerns about the central bank’s future policies weighing on the euro. Trichet indicated that there will be a 25 basis point cut announced at the next meeting but failed to clarify if and what unconventional measures may be used. He also stated that a zero interest rate would not be suitable for the eurozone.
There are no significant announcements taking place in the US or the eurozone today, to the euro/dollar pairing will be directed by broader market movements.
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