Most Analysts Expect ECB To Cut Again in Early 2014

Mario Draghi won’t follow his unexpected interest-rate cut with new liquidity injections into the financial system next month, economists say.

While a majority in a Bloomberg survey say the European Central Bank’s most probable next move is a measure such as long-term loans, 77 percent of those see it happening in the first or second quarter of 2014. Just 9 percent see Draghi taking action in December.

The ECB’s surprise policy move this month, which most respondents in the survey said was warranted, took the benchmark rate to a record low of 0.25 percent. That’s sparked speculation among economists and investors how far policy makers are prepared to go if inflation, already less than half of the ECB’s target, slows further, or the economic recovery weakens.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu