ECB Cancels Regional Currency War, Spreading Relief Across EU
- Denmark leaves benchmark deposit rate unchanged at -0.75%
- All major currencies weaken against euro after ECB meeting
Here's Why the Euro Spiked Today
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When the European Central Bank cuts rates, Denmark is generally supposed to follow in order to defend its euro peg. But on Thursday, it broke that pattern.
Ironically, President Mario Draghi’s decision to bring the ECB’s deposit rate to a record low of minus 0.3 percent sent the euro higher, promptly ending a currency war that had long plagued policy makers from Switzerland to Denmark and beyond. The central banks of Sweden, Norway and the Czech Republic now face less pressure to devalue their currencies after Draghi delivered a smaller stimulus package than many had expected.