The euro fell sharply against the dollar in choppy trading on Thursday after European Central Bank President Mario Draghi said the bank is technically ready for negative deposit rates and noted downside risks to the economy.
Draghi's comments came after the ECB cut its benchmark refinancing rate by 25 basis points to a record low 0.5 percent, its first cut in 10 months, and left the deposit rate unchanged.
"Although Draghi reiterated that the ECB was technically prepared for a cut in the deposit rate (now zero), in the past he had warned about the potential negative consequences. Now he is saying (he) has an open mind," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.
The euro fell 0.9 percent to $1.306, according to Reuters data.