The euro sank today, reaching a record low against the Australian dollar, after the European Central Bank announced its decision to decrease the main interest rate.
The ECB lowered its minimum bid rate (the benchmark interest rate) by 25 basis points to 0.75 percent. The bank also cut the interest rate on the deposit facility from 0.25 percent to zero, effectively eliminating it.
The monetary easing was expected by market participants, but the reaction from traders was strong nevertheless. ECB President Mario Draghi will comment on the decision later in a press-conference, perhaps giving hints about future moves of the central bank. The euro may yet reverse its losses as the slump was too big and on hopes that easier policy would bolster the declining economy of the eurozone. But for now the shared European currency is definitely in a bearish mode.
EUR/USD fell from 1.2525 to 1.2443 and EUR/JPY dropped from 100.04 to 99.10 as of 12:10 GMT. EUR/AUD tumbled from 1.2186 to the all-time low of 1.2072.
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