The euro jumped more than 1% against the dollar today, rebounding from a seven and a half month low.

The gains came after the European Central Bank cut its interest rate on deposits by just 10 basis points, disappointing some expectations of a sharper move. 

In a volatile few minutes around the decision, the euro rose sharply on a report by the Financial Times, later corrected, that the bank had not moved interest rates at all. 

After the decision to cut was announced, the euro surged to as high as $1.0742, its highest in a week.

The divergence in monetary policy between the euro and dollar was highlighted again yesterday, when US Federal Reserve Chair Janet Yellen hinted at a rate hike later this month, saying she was "looking forward" to lift-off. 

Yellen's hawkish comments sent the greenback soaring to a 12 and a half year high against a basket of six major peers, while the single currency slipped to its lowest level since mid-April.