ECB CUT

The Euro has depreciated sharply today following the European Central Bank’s (ECB) decision to cut the benchmark interest rate by another 0.10% to a new record low of 0.05%. The deposit rate was also lowered further into negative territory to -0.20%. ECB President Mario Draghi also announced the ECB will launch an asset purchase programme; buying debts from banks in a move that is hoped will add liquidity into the financial system and revive lending.

The Euro fell more than 1% against both the US Dollar and British Pound. Falling back below 1.30 against the US Dollar, hitting a low so far of 1.2969 and to a low of 0.7905 (1.2650) against the Pound. Further action including more aggressive stimulus measures such as Quantitative Easing from the ECB is still possible in the future.