ECB cuts base rate to 1.50% as Trichet warns further cuts could follow

Following the announcement of the BOE, the European Central Bank followed suit and reduced the base rate by 50 basis points (1.50%). As Inflation in the euro zone shows no sign of being an inmediate threat, Jean-Claude Trichet told reporters that economic growth would be less than in previous forecasts (up to a -3.2% contraction up from a previous -1%) and recovery could begin as early as 2010.

This rate cut leaves the base rate at its lowest point since the creation of the European Central Bank in 1999.

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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