The common European currency weakened against the U.S Dollar and Yen yesterday after the European Central Bank (ECB) kept its benchmark Interest Rate unchanged at 1% as expected. The ECB also stuck with the amount of covered bond purchases in its plan. The EUR declined amid speculation that ECB policy makers will say today that they don't see a need for additional measures to revive the Euro-Zone economy.
Analysts said that demand for the EUR fell after European Central Bank President Jean-Claude Trichet stated that Euro-Zone activity would likely remain weak for the rest of the year, and recovery may not start until the middle of 2010. The EUR traded at $1.3980, from $1.4115 yesterday. Against the Yen, the EUR declined to 134.15 Yen, from 136.53 Yen. The Europe's 16-nation currency may drop to the lowest level in more than 2 months against the Dollar in the coming week, as risk aversion increased after a report showed that U.S. employers cut more jobs than forecast in June.