The euro slipped yesterday 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.
David Madden, market analyst at CMC Markets, said a “downbeat Draghi” weighed on the single currency.
Europe’s major stock markets, meanwhile, held mostly steady, with “dealers still hopeful that Beijing and Washington DC are on the road to striking a deal” on trade, Madden said.
London’s FTSE 100 closed flat at 6,877.50 points, Frankfurt’s DAX 30 was flat at 10,924.70 points and Paris’ CAC 40 closed 0.3% down at 4,896.92 points, while the
EURO STOXX 50 ended 0.1% up at 3,110.76 points.
Share prices were also supported by mild gains on Wall Street in the New York morning.
Under its “quantitative easing” programme, the European Central Bank has pumped €2.6tn ($3.0tn) 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.
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 yesterday 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.
Pedestrians walk past the London Stock Exchange Group offices. The FTSE 100 closed flat at 6,877.50 points yesterday.
