The euro on Thursday (Sep 4) plummeted against other major currencies after the European Central Bank trimmed interest rates and announced an asset-purchase plan to counter deflation pressures.
Euro and Dollar (AFP)
NEW YORK: The euro on Thursday (Sep 4) plummeted against other major currencies after the European Central Bank trimmed interest rates and announced an asset-purchase plan to counter deflation pressures.
The euro skidded to $1.2952, creeping below US$1.30 for the first time since July 2013. The single currency also fell against the Japanese yen and the British pound.
Amid worries that the eurozone single currency area is threatened by stagnant growth and deflation, the ECB cut its main “refi” refinancing rate to 0.05 percent from 0.15 percent.
The bank also lowered its deposit rate and marginal lending rate and said it would undertake purchases of securities on a large scale to inject cash into the economy.
The moves reflects the central bank’s recognition that “they were running out of time,” said Boris Schlossberg, managing director at BK Asset Management.
“They realised that the situation is pretty severe,” Schlossberg added. “They simply can not do nothing, they have to do some kind of reaction to stimulate demand.”
David Song, currency analyst at DailyFX, said the dollar could advance further against the euro if Friday’s US Department of Labour jobs report for August exceeds expectations.
“The bullish sentiment surrounding the US dollar may gather pace throughout the remainder of the year, as a growing number of central bank officials show a greater willing to normalise monetary policy sooner rather than later,” Song said.
Source AFP
Đăng ký: VietNam News