ECB Holds Interest Rates as Expected

European Central Bank President Mario Draghi has announced a cut in the bank’s outlook for growth for the euro zone.
Although the ECB stuck to its forecast for a gradual recovery later in the year, the bank nonetheless cut the outlook for growth for 2013 from -0.5% to -0.6%.
Mario Draghi was speaking at a news conference after the ECB left its key interest rate unchanged at a record low 0.5%.
He said recent surveys of economic optimism had shown improvement and the economy “should stabilise and recover in the course of the year.”
The euro zone’s economy shrank by 0.2% in the first quarter of 2013 – the sixth quarter of contraction in a row. Unemployment is at 12.2%, the highest since the euro was introduced in 1999.
Some recent economic data – such as those on lending to companies – were downbeat, while others had improved.
The consensus after a “very rich discussion” on the bank’s 23-member governing council was that there “wasn’t any directional change that would justify taking action at this time,” Draghi said.
The ECB chief added that the bank’s governing council had discussed a wide range of measures that go beyond interest rates to help stimulate the euro zone economy.

via RTE News

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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