ECB President Mario Draghi
ECB President Mario DraghiReuters

The European Central Bank unexpectedly slashed the benchmark rates on Thursday as the region has been struggling to boost economic recovery and get out of deflationary pressures, pushing euro to a 14-month low against the dollar.

The ECB cut the key refinancing rate to 0.05% to 0.15% while analysts had been expecting an unchanged decision. The new rate will take effect from the operation to be settled on 10 September, the central bank said.

The interest rate on the marginal lending facility will be decreased by 10 basis points to 0.30%, the ECB said.

The interest rate on the deposit facility will be decreased by 10 basis points to -0.20%. All the new rates will take effect from 10 September.

EUR/USD plunged to 1.3023, its lowest since July last year, and nearly 1% down from the previous close.

The market is waiting for the press conference of the ECB President Mario Draghi, due at 2:30PM CET, for the details of the decision.

EUR/GBP fell to 0.7930 from 0.7989 and EUR/JPY to 136.88 from 137.80.

Euro falls
EUR/USD 30 minutesIB Times UK/FXStreet