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As expected, the European Central Bank (ECB) left interest rates unchanged. The main interest rates remain at a low of 0.0% and deposit interest rates remain unchanged at a moderately negative level of -0.4%.
The Governing Council is of the opinion that rates should not rise if necessary to achieve the ECB's medium-term objective of just below 2% inflation. According to its president, the ECB will strictly monitor the situation.
The interest rate situation could change in the second half of 2019, when we could see a slow rise in interest rates.
At a press conference, Mario Draghi confirmed the slowdown in economic growth in the euro area. The data is still weaker than expected, and it was also mentioned that the slowdown was largely due to an increase in protectionist policies and the high volatility of the financial markets.
In view of the expected economic growth, he admitted that he would probably be weaker in the short term. The ECB is ready to adapt its monetary policy instruments in order to achieve the overall goal of inflation.
The economic weakness of the euro area, coupled with growing concerns about the negative impact of global trade tensions, has led economists to change their expectations of the ECB maintaining the ECB's policy.
The most traded currency pair, the EUR / USD, fell on the first day, but at the press conference, the short-term trend reversed and was reinforced closely. from 0.50% to 1.137.
The author of the article is Patrick Mack, analyst at TopForex
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