LONDON (AFX) - The euro dipped on the European Central Bank's decision to hold interest rates steady, dealers said. At 12:44 pm, it was trading at 0.9275 usd. On the announcement at 12:45 pm, it fell to 0.9267 usd before dropping to 0.9263 usd. By 13:01 pm, it had recovered to 0.9272 usd.
Dealers said the market had clearly taken too much notice of rumours that the ECB might follow the U.S. Federal Reserve, the Bank of England and the Bank of Japan in easing rates.
"There was some speculation built up in the market that perhaps it might surprise with a rate cut today," Standard & Poor's MMS senior currency strategist Will Rugg said.
"I think some hope had built up, and with hindsight that was clearly overblown, so there might have been a bit of buy on the rumour and sell when the rumour didn't come true type of reaction," he said. Dealers said the ECB press conference from 1:30 pm will be closely followed for rate cut signals.