The euro (EUR) was last seen dropping against the US dollar (USD) late Thursday following the European Central Bank’s (ECB) latest announcement regarding interest rates, known as the Minimum Bid Rate. Stuttering mildly ahead of the decision, there was an atmosphere of EUR avoidance in the market even prior to the statement by ECB President Jean-Claude Trichet.
With nearly every analyst anticipating today’s move, and the accompanied dovish statement by Trichet, the market followed suit with expectations and witnessed a quick plummet in EUR values. Several reports have begun to assume a possible rate reduction as early as mid-2012 by the ECB, though future economic growth will factor heavily in such a decision. For now, traders appear to be looking to a weakening of the EUR through the remainder of the week.
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