— more to come
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The European Central Bank was expected to cut the interest rate by 10 basis points from -0.40% to -0.60% and also extend its commitment to maintaining low-interest rates for longer. However, some had expected a more aggressive rate cut and an announcement of a new bond-buying scheme – QE. Officials at the bank have recently expressed contradicting views about the scope for new stimulus.
The economic situation in the euro-zone has been deteriorating in the past few months, with signs of an imminent recession. Moreover, inflation – which is the ECB’s mandate – has remained depressed with core prices rising by less than 1% YoY.
EUR/USD has been trading above 1.10 ahead of the all-important decision and the press conference by ECB President Mario Draghi.
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