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

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.