ECB interest rate cut hurts euro

The euro was weaker in relation to the US dollar and the Japanese yen Thursday after the European Central Bank cut interest rates by half a percentage point to 2 percent.

The cut was about what analysts had expected.

In afternoon trade in New York, it took $1.313 to buy a euro, while at the same time the yen traded at ¥117.9031 to the euro and at ¥89.795 to the greenback.

ECB President Jean-Claude Trichet, in comments accompanying the announcement of the cut, hinted that rates could remain steady in February, but his remarks also contained hints that there could be another cut in March.

Even with today’s cut, the Eurozone interest rate remains among the highest in the industrialized world, with the UK rate at 1.5 percent and the US rate in a range between 0 and 0.25 percent.

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