European Central Bank meeting on tap


The European Central Bank announced today that interest rates would remain unchanged "for an extended period of time".

After the European Central Bank (ECB) chose to hold its rates and keep its current monetary policy, the Euro witnessed a decline in value.

"The euro rose 0.3 percent to $1.2197 as Draghi spoke".

"And Draghi acknowledged the slowdown in economic momentum, and though that is not new news, it would give investors with a long bias an incentive to get back into the market", he said.

The economy in the 19 countries that use the euro currency turned in strong growth of 2.5 percent past year, the best in a decade.

The main refinancing rate will stay at 0.00 percent. But a slew of recent data suggests the eurozone area has lost some of its momentum. German industrial orders and production data have also disappointed. If growth shows signs of slowing that could be a reason to extend the bank's 30 billion euros ($36 billion) in bond purchases.

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Concerns about protectionist threats, geopolitical risks and global trade tensions have added to doubts about the strength of the eurozone recovery.

Draghi also warned in Washington last week that rising protectionism might already be hurting business and consumer sentiment.

"We have to see what the exchange of - so far - rhetoric, about protectionism will produce".

Trump is widely expected to end a temporary exemption for European steel and aluminum imports from new tariffs imposed by the USA two months ago, which runs out on May 1.

But "obviously we can't know what are going to be the direct effects of potential retaliation" if the United States threats become reality, he went on. "What is certainly known is that the events have a profound and rapid effect on confidence.and confidence can in turn affect the growth outlook", he said.

The ECB chose to keep their main overnight rate at 0.00%, their marginal lending facility rate at 0.25%, and their deposit facility rate at -0.40%.

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