The euro slumped broadly on Thursday, hitting a one-month low against the dollar, after the European Central Bank cut its main interest rate to a record low and reduced its deposit rate to zero to help tackle the euro zone debt crisis. Analysts said although the market had been positioned for a 25 basis point cut in the ECB'S main refinancing rate, the cut in the deposit rate - effectively encouraging banks to lend funds to each other overnight - caught some by surprise.
Other investors, however, were hoping for more. The euro was last down 1.2 percent against the dollar at $1.2376, after falling as low as $1.2362. Against the yen, the euro was last 1.1 percent lower at 98.93 yen. The dollar posted a two-week high against the yen after US employment data showed signs of hope for the labour market. The dollar was last up 0.1 percent at 79.92 yen. Sterling was down 0.4 percent against the dollar.
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