ECB Holds Rates Confirms Slower Growth Momentum in Europe

The European Central Bank (ECB) held interest rates steady on Wednesday, shortly after the International Monetary Fund (IMF) sharply downgraded its economic growth forecast for the euro zone economy.

The ECB has been forced to backtrack its plans to tighten monetary policy, amid an intensifying climate of economic gloom.

Speaking at a press conference in Frankfurt, Germany on Wednesday, ECB President Mario Draghi warned that data gathered by policymakers in recent weeks had confirmed “slower growth momentum” in the euro zone.

Economic uncertainty relating to geopolitics, protectionism and emerging markets had negatively impacted investor sentiment in the bloc, he added, with risks “tilted toward the downside” over the coming months.

The German 10-year government bond yield, an important benchmark for European fixed income assets and one that is viewed as a safe-haven for investors, dipped into negative territory on the back of Draghi’s comments. The euro also hit session lows against the dollar, down 0.3%, to trade at 1.1232.

via CNBC

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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