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November 3rd 2005

ECB cools speculation over rate hike

When Jean-Claude Trichet, President of the European Central Bank (ECB), hinted several weeks ago that the ECB was poised to raise interest rates, the Euro immediately jumped almost 2%. Today, however, Trichet sang a different tune, insisting a hike in interest rates was not indeed imminent. The announcement clearly came as a shock to economists and investors, many of whom had predicted the ECB would raise rates for the first time in two years, on the basis of Trichet’s earlier comments. According to the ECB, interest rates are at an appropriate level, whereby inflation is contained without constraining economic growth. Bloomberg News reports:

“Trichet was expected to be quite hawkish, so the euro is being sold on disappointment with the more dovish comments…The market will now be looking for signs that the rate hike [will happen in] December.”

Read More: Euro Drops as Trichet Damps Speculation About Rate Increases

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Posted by Adam Kritzer | in Central Banks, Euro | No Comments »

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© 2004 - 2018 Forex Blog.org. Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.