The Euro has tumbled against the Pound briefly hitting its weakest level since January 2013 as rumours that the European Central Bank is considering using a negative deposit rate if the Eurozone continues to struggle.
According to two people who wished their identities to remain secret, policy makers at the ECB are considering a smaller than normal cut in the deposit rate if officials decide to take rates into negative territory. According to Bloomberg the sources inside the ECB said that the bank was weighing up a -0.1% deposit rate.
The news come just a day after ECB Vice President Vitor Constancio said that while quantitative easing was still a possibility, the central bank had not discussed how it would be implemented.
“A smaller reduction to the deposit rate would make sense, given this is unchartered territory. The ECB needs to do more to fight uncomfortably low inflation which could expose the Eurozone to deflationary risks,” said Nick Kounis from ABN Amro Bank.
The Euro could weaken further on Thursday if data out of Germany and the wider Eurozone disappoint. The latest Markit Manufacturing and Services PMI data is due for release in both.
Euro (EUR) Exchange Rates
As of 16:15 Pm GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3469
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8334
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4344
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6186
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4068
The Euro/ Japanese Yen Rate Exchange Rate is currently in the region of: 134.6318
The Euro/Swiss Franc Exchange Rate is currently in the region of: 1.2315
The Pound Sterling/ Euro Exchange Rate is currently in the region of: 1.2000
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7424
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6972
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6176
The Canadian Dollar/Euro Exchange Rate is currently in the region of: 0.7107
Swiss Franc/Euro Exchange Rate is currently in the region of: 0.8119
