CURRENCIES: Euro Lower After Trichet; Yen Slumps As Carry Back In ...
The euro fell against the dollar on Thursday after the European Central Bank hiked its key interest rate by a quarter percentage point to 3.75% as expected and said rates are now "moderate" rather than "low." Jean-Claude Trichet, President of the Frankfurt-based ECB, which sets interest-rate policies in the 13 countries that use the euro, said rates remain "accommodative" and that the central bank will "very closely" monitor price developments, an indication that a rate hike in the next quarter is likely. But Trichet did make one concession, saying that rates are now "moderate." He added that he wasn't preparing markets for a "restrictive" policy. "Trichet opted for a less hawkish tone when he said that interest rates are now moderate rather than low," said Kathy Lien, chief strategist at DailyFX.com.
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