06, May 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

The euro fell on Thursday after the European Central Bank announced lowering key interest rates by 25 basis points to 0.5% due to weak economic data in the eurozone. The euro/dollar was trading at 1.3060 after the ECB President Mario Draghi's press conference, compared to 1.3202 on Wednesday evening. When the ECB statement was issued the euro/dollar rose above 1.32. The pair was trading at 1.3149 ahead of announcement of the decision of the central bank in the eurozone. But the euro "went into a steep dive" after Draghi said that the ECB was technically ready to lower interest rates on deposits.

Lowering the main refinancing rate by 25 basis points from the level of 0.75% expected by market participants. The rate was at this level since July 2012. The ECB also announced reduction of the marginal lending rate by 50 basis points. Now it is equal to 1.00%.

According to HSBC, China has slowed the growth of industrial activity. At HSBC on Thursday revised down April value indicator of manufacturing activity in China to 50.4. The result is below the prior value 50.5 and well below the March value 51.6. The indicator remained above the threshold level 50.