Web
Analytics
The news is by your side.

Euro slides as ECB warns on economic outlook

LONDON: The euro slipped on Thursday after the ECB trimmed its growth forecast for the eurozone because of “mounting uncertainties” from within and outside the region.

European Central Bank chief Mario Draghi said risks facing the area were now “moving to the downside”, although that did not stop the bank from pulling the plug on its massive emergency crisis-fighting economic stimulus known as quantitative easing (QE).

“While Mario Draghi was boxed in by previous announcements about QE, his press conference revealed two stark truths –- he remains deeply concerned at the fragility of eurozone growth and reserves the right to administer further monetary stimulus,” said JR Zhou, market analyst at online trading platform Infinox.

Europe’s major stock markets posted mild gains after the ECB’s news conference, lifted by opening gains on Wall Street.

Sterling recovers

Under its “quantitative easing” programme, the central bank has pumped 2.6 trillion euros ($3.0 trillion) into the eurozone economy in order to stoke growth and inflation.

The ECB originally began buying debt in 2015, saying it wanted to fight the threat of deflation and keep money flowing around the eurozone economy.

Growth has picked up since then, surging in 2017 before falling back this year, but forecasts see inflation falling short of the central bank’s target of close to, but below 2.0 percent.

The British pound meanwhile pushed higher, one day after Prime Minister Theresa May won a vital confidence vote that was sparked by her Brexit deal.

Asian equities posted more gains Thursday as investors were cheered by conciliatory noises from China and the US on trade.

While the tariffs row between Beijing and Washington is far from being resolved, there is a lot more optimism on trading floors this week that the world’s top two economies can make headway in talks over the next three months.

Dealers mulled a report that Beijing is considering replacing its “Made in China 2025” programme that aims to boost its technology sector, a key point in anger for Washington.

The Wall Street Journal said authorities were looking at putting back the scheme’s timetable by a decade to concentrate on improving standards.

That followed news China had agreed to resume importing soybeans — a major boost for US farmers — as well as remove a levy on US autos imposed earlier this year in response to Donald Trump’s initial tariffs.

Key figures around 1440 GMT –

London – FTSE 100: FLAT at 6,881,75 points

Frankfurt – DAX 30: UP 0.3 percent at 10,956.34

Paris – CAC 40: UP 0.1 percent at 4,909.52

EURO STOXX 50: UP 0.5 percent at 3,122.60

New York – Dow Jones: UP 0.5 percent at 24,642.64

Tokyo – Nikkei 225: UP 1.0 percent at 21,816.19 (close)

Hong Kong – Hang Seng: UP 1.3 percent at 26,524.35 (close)

Shanghai – Composite: UP 1.2 percent at 2,634.09 (close)

Pound/dollar: UP at $1.2635 from $1.2629 at 2200 GMT

Euro/dollar: DOWN at $1.1359 from $1.1369

Dollar/yen: UP at 113.55 yen from 113.29 yen

Oil – Brent Crude: DOWN 17 cents at $59.98 per barrel

Oil – West Texas Intermediate DOWN 40 cents at $50.75

Comments

comments

You might also like