While the interest rate cut by the ECB to 0.75% was widely expected, the elimination of the deposit rate to 0% was a shocker that sent the euro plunging across the board.
Apart from the near 100 pip plunge in EUR/USD, it’s important to note two interesting pairs – one that moved to historic lows and one that could explode.
Update: Follow the live blog of the ECB press conference.
EUR/AUD is trading at 1.2078, below lows seen earlier in the year. It is now in the lowest levels since February 1989 (taking the Deutschmark into consideration).
EUR/CHF is guarded by the Swiss National Bank at 1.20. The SNB reiterated its stance from September 2011 to buy “unlimited amounts of foreign currency”. But how long can it hold on?
There are many speculators who are waiting for the levee to break. If 1.20 breaks, it will be a fast ride down, of hundreds of pips.
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