Summary Euro fell against dollar on hints of interest rate cut from the European Central Bank.
LONDON (AP) - An interest rate cut from the European Central Bank and hints it may take further measures gave European markets only a small lift Thursday amid ongoing worries about the state of the eurozone economy. U.S. stocks recovered their poise in the run-up to monthly payrolls data Friday.
The euro was a big loser Thursday after Mario Draghi, the European Central Bank's president, said the institution was ready to charge banks that decide to keep deposits at the bank. A negative deposit rate would ostensibly push banks to lend more rather than hoard cash. Draghi conceded he was "frustrated" that the banks weren't lending more.
The deposit rate is currently zero percent but wasn't cut alongside the main benchmark rate.
The central bank, which sets interest rates for the 17 European Union countries that use the euro, cut its benchmark rate by a quarter of a percentage point to a new record low of 0.5 percent. The decision was widely anticipated following a grim run of economic data for the eurozone.
Following his confirmation that negative deposit rates could be considered, the euro fell sharply. It was trading 0.9 percent lower at $1.3061, having traded 0.2 percent earlier in the wake of the interest rate reduction.
Given that the rate cut was largely priced in by the markets and there are ongoing concerns over the state of the eurozone stocks in Europe were fairly subdued.
The CAC-40 in France rose 0.1 percent to close at 3,858.76 while Germany's DAX rose 0.6 percent to 7,961.71. The FTSE 100 index of leading British shares, which was not on holiday on Wednesday, rose 0.2 percent to 6,460.71.
