Euro Drops After ECB Comments

The euro has dropped a full penny against the dollar in the last hour or so on new comments from Bundesbank President and ECB Governing Council member Jens Weidmann.

According to Weidmann, the ECB may cut interest rates if new economic data warrants such action.

The ECB hasn't cut the benchmark refinancing rate since July 2012. Currently, it stands at 0.75%, so there is a little bit of room for the ECB to lower it further if it so chooses.

Crédit Agricole economist Frederik Ducrozet thinks this means a rate cut is now a done deal:

Buba backing #ECB rate cut means it's a done deal. Question is, is it a concession to the doves to remain tough on non-conventional easing?

— Frederik Ducrozet (@fwred) April 17, 2013

The euro is now trading near 1.3048 versus levels around 1.3137 before the Weidmann comments hit the tape.