Update: ECB Cuts Rates, Euro Drops Then Pops

The European Central Bank cut its main refi rate by 25 basis points to 0.5 percent, as expected. Also, the ECB cut the marginal lending rate unexpectedly by 50 basis points to 1.00 percent.

The cuts come as Eurozone inflation slows and output indicators continue to point to a protracted slowdown across the Eurozone.

The euro initially spiked lower to 1.3117 but then quickly rebounded and traded through the 1.32 level. The EUR/USD traded 1.3202 as of writing.

ECB President Mario Draghi will comment on the policy moves at his press conference at 8:30 am eastern.