ECB Cuts Rates Deflates Euro

The European Central Bank cut interest rates to a record low on Thursday in a bid to prevent the eurozone from sinking into a period of stagnation and deflation.
Reducing interest rates for the second time this year, the central bank cut the main refinancing rate to 0.25% from 0.5%. It kept its deposit rate unchanged at 0%.

Some economists had called for the ECB to cut interest rates at Thursday’s meeting, after a surprise decline in inflation. But most had expected the central bank to wait until December, when it will have third-quarter GDP data to consider and a better idea of the trend in inflation.
Eurozone unemployment is stuck at record levels above 12% and the economy is failing to generate momentum after emerging from recession earlier this year.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza