Draghi revises down growth forecast, euro falls . . . . . . . Following today`s rate decision which saw a hold to the ECB’s interest rate at record low of 0.50 percent, ECB President Mario Draghi said the stance remains accommodative as long as needed, declaring that today’s decision was unanimous. Meanwhile, Draghi retreated comment last month regarding the bank’s interest rate outlook, where he said the ECB expects rates to remain low for an extended period of time. Draghi said sentiment indicators and survey data have shown improvement from low levels which suggests a gradual recovery later this year as improvement in financial markets start affecting the economy, yet labor-market conditions remain weak. Draghi echoed his previous comments on the economy as he expects the outlook for the euro area to remain weak while sentiment in the euro area improved significantly. Draghi said growth momentum to remain to the downside as economic activity is seen stabilizing this year and in 2014. According to Draghi, growth should stabilize at a subdued pace due downside risks stemming from slow reform implementation, in addition to weaker domestic and global demand. The ECB revised down growth forecast for this year and 2014. As for inflation, euro area inflation risks are broadly balanced for the euro area where underlying price pressure, stemming from energy prices, should remain contained. While he said that inflation expectations are firmly anchored in line with price stability. September’s growth projections were downwardly revised from June projections, which suggested annual GDP growth will be at 0.4 percent growth from 0.6 percent in 2013 and at 1.0 percent from june’s forecasts of 1.1 percent in 2014. The ECB raised inflation forecasts for this year at 1.5 percent from prior estimates of 1.4 percent, while inflation to remain unchanged in 2014 at 1.3 percent. Euro extended drop after Draghi’s comments, where the EURUSD pair traded at $1.31701, from an opening at $1.32058. #egyptyard
Posted on: Thu, 05 Sep 2013 13:01:48 +0000
Trending Topics
Recently Viewed Topics
© 2015