The euro reached a high against the US dollar on Thursday after the European Central Bank (ECB) announced its intention to postpone the first rate hike after the crisis until at least the middle of next year.
ECB President Mario Draghi also offered to pay banks if they borrowed money from the central bank and passed it on to households and corporations.
Trading tensions and fears of a global recession have put markets in a difficult position Given the growing hopes of market participants this week that ECB President Mario Draghi could signal a late burst of monetary policy support before his term expires in October the central bank announced that interest rates on its marginal lending facility and deposit facility would remain unchanged at 0%, 0.25% and -0.40%, respectively. These reached a record low following the euro sovereign debt crisis of 201
In a surprise revision of its forecast for the future, the ECB said in a statement that the government council "is now expecting" ECB key interest rates should remain at their current levels at least until the first half of 2020.
The euro climbed 0.4% to hit a session high of 1.1266 USD shortly after the announcement.
Investors are keen to watch the comments from Draghi's press conference at 1:30 pm London time also announce new economic forecasts for staff that may show slower growth next year.
ECB policymakers met this week in Vilnius, Lithuania, to discuss updated forecasts and reduce inflation expectations.
& # 39; Play for the markets & # 39;  "It's more restrained than we'd probably expect … But I would not say the ECB is really one step ahead of the curve," said Florian Hense, European Economist in Berenberg, on Thursday opposite Julianna Tatelbaum of CNBC.
said Hense He believed that the revised ECB forecast showed that the central Bank liked to follow in the footsteps of the Federal Reserve by "playing the markets".
The announcement of the ECB comes at a time when sentiment among some of them has changed its global counterparts. The Australian central bank cut interest rates on Tuesday for the first time in three years, while the US Federal Reserve recently signaled its openness to easing.
Meanwhile, the Bank of India lowered its key rate this year for the third time. Englisch: www.cosmetic-business.com/en/showar…hp?art_id=26 could put.
In April, Draghi said ECB decision-makers would look at how monetary policy works when they set the terms for their new cheap loan program for banks – the TLTROs (Targeted Longer-Term Refinancing Operations).
Essentially, these loans should encourage Eurozone banks to grant more loans to the real economy. They have a negative deposit rate so they would pay the lenders to take the cash, which is a strong incentive for the banks to use it.