Euro Falls Sharply After the Speculation About Weber's Future

The euro fell sharply across the board after a newswire report ignited speculation that German central bank head Axel Weber won't succeed Jean-Claude Trichet as European Central Bank president.

The report said that the Bundesbank will make a statement about the professional future of Weber later Wed.

Weber, considered to be one of the most hawkish members of the ECB's governing council, has been seen as a front runner to succeed Trichet later this year, boding well for the single currency's rate expectation-driven rally.

The currency plunged to the day's low against the dollar in the wake of the news, dropping from $1.3652 to $1.3612 and dropping against the Swiss franc and the Japanese yen as well.

German government bonds recovered after the headline, with schatz yields now flat on the day. March bunds are down 0.07 at 122.75 vs 122.47 session low, while the two-year schatz yield is flat on the day at 1.435%, having risen three basis points earlier.


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