Euro Gains Despite European Central Bank (ECB) Rate Cut - Why?

The euro ended Thursday on a mixed note, as the currency surged against the Japanese yen, US dollar, and Swiss franc but slipped against the ultra strong commodity dollars.

The moves came after the European Central Bank (ECB) cut rates by 25 basis points to 1.25 percent, which served as a positive surprise since a Bloomberg News poll had listed a forecast for a 50 basis point reduction. However, given the content of ECB President Jean-Claude Trichet’s post-meeting press conference, there is some bearish potential for the euro he not only left the door open to further rate cuts, but also hinted that quantitative easing may be discussed during their next meeting.