ECB Closer to Rate Cut as Soon as Next Week

The European Central Bank is closer to lowering interest rates than at any time since it last cut them in July 2012 and is likely to shave a quarter-point off at its policy meeting next week.

Senior sources involved in the deliberations say momentum is building for action to help a euro zone economy which has slipped back into recession, a move that some policymakers wanted to take earlier this year.

Inflation sliding well below target gives the bank scope to act and a senior ECB official said even Bundesbank chief Jens Weidmann, the most hawkish member of the 23-man Governing Council, had an open mind.

After the bank’s last monetary policy meeting on April 4, ECB President Mario Draghi signaled that a cut could come soon when he said that the bank stood “ready to act” to boost the recession-hit euro zone economy.

“Now we are free,” one senior ECB official said. “For the next meeting in Bratislava, I would look at rates, certainly.”

via Reuters

This article 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 Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.