Euro (FXE) Plunges After ECB Meeting

The Euro (EUR) tumbled against all of its major counterparts today as the European Central Bank left the interest rates unchanged at 1.25%, while signaling that there will not be a rate hike in June either. Most of the investors expected that the ECB will hold the rate steady at this meeting, but hoped for a rate hike in June, therefore the language of the statement and comments by Trichet triggered a sell-off, as it became clear that a June rate hike is not probable. At the press conference after the meeting, the ECB President Jean-Claude Trichet did not use the strong language he used recently, thus, indicating to the markets that there is no rush to hike the rates, especially after recent worrying European and US economic news. After the press conference, the Euro dropped across the board, falling against the US Dollar (USD), Japanese Yen (JPY), Swiss Franc (CHF) and basically against all of the other major currencies. The EUR/USD pair had its worst day for more than half a year, falling from 1.4897 all the way to 1.4520 and keeps sliding at the moment. The EUR/JPY, meanwhile, lost more than 300 pips, plunging from 119.50s to 116.25, and the EUR/CHF fell from 1.2775 to 1.2640.