Exchange Rates Update-EURO,Yen Decline. AUD Gains

The Euro plunged against major currencies, after the European Central Bank decided not to raise interest rates to tackle inflation. At the time of market closure, the Euro-USD exchange rate registered a slight gain of 0.0325 percent to be at USD $ 1.4544.

The European Central Bank president, Jean Claude-Trichet, announced that the central bank would wait until June before raising interest rates to combat inflation. This announcement wrong-footed investors who were expecting an increase in the interest rates. Consequently, the Euro plunged against major currencies. However, the Euro was able to gain against the US Dollar after reports suggested that Germany’s industrial output rose by 0.5 percent in March.

The Japanese Yen fell from a seven-week high on speculation that Japan will intervene in the foreign exchange market in order to overturn the recent gains in its currency which has hampered export earnings. Investors also took advantage of the five-week high of the Yen by selling it. The USD-JPY exchange rate rose by 0.4574 percent to 80.4410 Yen.

The Australian Dollar made advances against all major currencies after the Australian Central Bank declared that they would unveil a series of budget cuts next week to ensure a budget surplus. Furthermore, they even stated the increasing likelihood of raising interest rates in order to curb inflation. Both of these announcements helped the AUD-JPY exchange rate to increase by 1.7 percent to 86.17 Yen.