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The euro went down to the lowest level from April 2006 in opposition to the US dollar on Monday as European Central Bank President Jean-Claude Trichet indicated that the ECB might cut rates on November 6. Throughout the speech in Spain, the forthright Trichet explained, “I believe it’s possible that the Governing Council would reduce interest rates once again at its next conference.” With this comments together with signs of cooling inflation pressures and slowing increase, Credit Suisse sudden index swaps are currently pricing in 129.2 basis points worth of rate cuts by the ECB throughout the coming 12 months, compared to 117.3 basis points on Friday and 88.9 basis points at the opening of the month. The possiblity for lower interest rates indicates additional negative aspect of risks for the euro.
20:23
Posted on Oct-28-2008
