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ECB Rate Cut

November 3, 2011

The euro was steady Thursday morning in New York, amid reports indicating that Greece will not hold a public referendum on the euro zone bailout fund in PM George Papandreou’s government collapses.

Yannos Papantoniou, former Greek economy and finance minister, told Bloomberg that a December 4 public vote on austerity is "highly unlikely". Papandreou’s opposition party is demanding a transition government that would approve the beefed up rescue plan announced last week.

Headlines from Greece overshadowed the latest interest rate decision from the European Central Bank.

Under fire for not doing more to support the sluggish euro zone economy, the ECB voted to slash its benchmark interest rate by a quarter point to 1.25 percent.

The euro was not greatly impacted by the somewhat surprising decision. The single currency eased a bit to $1.3740 versus the dollar in the immediate aftermath of the rate call.

The euro slipped to Y107.10 versus the yen, giving back overnight gains. Losses were more pronounced versus the sterling, with the euro dropping to GBP 0.8575 from near GBP 0.8645.


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