Thursday, 3 Feb 2011

EUR Trading Lower from Dovish ECB Statement

The euro fell broadly on Thursday and could extend losses after European Central Bank (ECB) President Jean-Claude Trichet threw cold water on expectations euro zone interest rates would rise any time soon.

His comments disappointed investors who had expected a more hawkish statement after recent inflation data came in above forecast. Expectations the ECB would lift interest rates sooner than the Federal Reserve boosted the euro in recent weeks.

The euro fell more than 2 cents on the day, moving further away from a 12-week high of $1.3862 set on Wednesday. It was last down 1.3 percent at $1.3626. Traders said support now lies at $1.3570, this week's low, and a break would open the door for a slide below $1.35.