Euro on record run in currency markets. ECB holds rate steady, BOE cuts by 25 basis points. | CountingPips Forex & Currency Trading Blog

April 10, 2008 - Forex Economic News

Euro on record run in currency markets. ECB holds rate steady, BOE cuts by 25 basis points.

The euro continued its record run today as the European currency reached record highs against the U.S. dollar and British pound sterling. The euro hit the all time record high exchange rate of 1.5912 dollars per euro before the European Central Bank's interest rate decision earlier today. The ECB made the decision to keep its key interest rate unchanged at 4.00 percent. The ECB rate decision was widely expected as ECB President Jean-Claude Trichet has been very outspoken of keeping to a strict policy of taming inflation.

The Bank of England also announced an interest rate decision today and reduced its official bank rate from 5.25 percent to 5.00 percent. The BoE detailed the inflationary pressures affecting the economy but decided that the risks to economic growth were greater and a rate reduction would be best. The BoE stated that, "Credit conditions have tightened and the availability of credit appears to be worsening" and that in the U.K., "business surveys suggest that growth has begun to moderate and that a margin of spare capacity will emerge during this year. This should help to keep domestic inflationary pressures in check in the medium term." The BOE had last reduced its interest rate by 25 basis points in February. The pound sterling took it on the chin against the euro in currency trading following the rate announcement this morning. The euro reached the all time high exchange rate verses the pound at 80.29 pence per euro.

Tags: interest rate, euro, gbp, ecb, boe, euro record high, usd, pound, dollar

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