FOREX: EURO loosing the pans

Thursday after ECB President Jean-Claude Trichet announced the possibility of interest rates reduction euro sharply dropped its value, demonstrating the biggest weekly decline from August 2005.

The pressure on euro began from the ECB benchmark borrowing costs being unchanged at 4%. It declined against 14 of the 16 most traded currencies and demonstrated 2.2% of decline, with $1.4482 at 2.32 pm in Tokyo and $1.4481 in New York  after dropping to $1.4467. Versus JPY EUR lost 0.2%. It is expected that euro may extend to lose value due to the speculative situation on the market, regardless to the deceleration of the US economy and further decline of the US dollar against major currencies. Such a tremendous decline of euro is partly caused by the fact that Asian markets are closed for the Lunar New Year holiday. However, it is expected euro would gain back its strength in the frame of upcoming meeting of Group of Seven this weekend.

Steven Butler, Director of Forex trading at Scotia capital in Toronto talking about the perspectives of euro said: "We're a bit of a pivot point in the euro here, and if we can get stay below the $1.4520 area I think that could open the flood gates a little more".

Natalia, reporter of Ecommerce Journal