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Currency Center

Dollar mixed on expected ECB rate slash

Greenback jumps against euro after European producer prices show steepest decline in 22 years.

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By Julianne Pepitone, CNNMoney.com contributing writer

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NEW YORK (CNNMoney.com) -- The dollar rose against the euro Tuesday on negative European production data and ahead of a central bank meeting expected to slash rates to a record low.

A report showed European industrial producer prices dropped 3.1% in March from a year earlier, their steepest annual decline in in 22 years.

The data put more pressure on the European Central Bank to spark economic growth. The ECB will meet Thursday, and it's expected to cut its main interest rate to a record-low 1%.

"That the ECB will want to continue easing monetary conditions for some time to come is pretty much a foregone conclusion," wrote Carl Weinberg, chief economist at High Frequency Economics, in a research note.

The ECB could continue cutting rates or attempt unconventional policy actions such as buying securities to spark lending and economic growth.

Weinberg noted that the European Commission this week warned the euro zone's economy may shrink 4% this year and inflation will remain below target.

The dollar rose 0.56% against the euro to $1.3332.

The Bank of England will also hold a policy meeting Thursday, when it's expected to hold rates at a record-low 0.5%. The British pound was up 0.44% against the greenback to trade at $1.508.

The dollar was little changed against the Japanese yen. Both currencies are considered safe havens in uncertain economic times. The buck was up 0.15% against the yen at ¥98.85. To top of page

Track 17 major currencies

Features
Markets Last Change
Dow Jones 10,388.90 22.75 / 0.22%
Nasdaq 2,194.35 21.21 / 0.98%
S&P 500 1,105.98 6.06 / 0.55%
10-year Bond 99 5/32 Yield: 3.47%
U.S.Dollar 1 euro = $1.485 -0.021
December 4, 2009 12:00 AM ET
CompanyPrice% Change
Big Lots Inc 27.94 18.69%
OfficeMax Inc 12.61 15.05%
BlueLinx Holdings Inc 2.99 12.41%
Kelly Services Inc 11.58 11.67%
Dec 4 3:53pm ET †
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