Investing.com - The euro spiked against the other major currencies on Thursday after the European Central Bank cut its deposit rate, but left the main refinancing rate unchanged after its monetary policy meeting.
EUR/USD jumped 0.94% to 1.0713 after falling to 1.0577 earlier, not far from Wednesday’s seven-and-a-half month trough of 1.0549.
The ECB’s governing council lowered the deposit facility rate to -0.3% from -0.20%, in line with market expectations.
The main refinancing rate was left unchanged at a record-low 0.05%, in line with market expectations. The central bank also held its marginal lending rate, the rate charged to banks when they borrow from the ECB, at 0.30%.
The ECB also said it was to announce “further policy measures” at its post policy meeting press conference.
Market analysts expect the central bank to increase the size of its monthly quantitative easing program to €75 billion from the current €60 billion.
Weak euro zone inflation data on Wednesday hardened expectations that the ECB could announce fresh measures to bolster price growth. At its October meeting ECB head Mario Draghi indicated that more stimulus was a possibility.
The single currency also jumped higher against the yen and the pound, with EUR/JPY surging 1.01% to 132.12 and EUR/GBP rallying 0.75% to 0.7149.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.72% to 99.33, backing off Wednesday’s seven-and-a-half month peaks of 100.54.