- Mario Draghi, ECB President
The European Central Bank maintained interest rates unchanged at a record low 0.05% and kept the deposit rate and marginal lending rate at –0.2% and 0.3%, respectively. However, ECB President Mario Draghi said that the central bank is ready to deploy another big-bang stimulus package, which could include more bond purchases and a cut to the already negative deposit rate. Financial markets surged amid expectations of extra ECB stimulus measures, whereas the Euro plunged to the lowest level in two weeks versus the US Dollar of $1.1152. Draghi's statement concerning additional stimulus underscores the fragile state of the global economy. ECB President also revealed that some policy makers of the governing council had insisted on taking more action to underpin the region's economy immediately, blaming the downturn in the emerging markets, including China, for renewed weakness in the Euro bloc.
The Euro zone's economic output climbed 0.4% in the second quarter, following the 0.5% growth in the preceding three-month period. Yet, a slew of downbeat economic data from Germany, the Euro region's powerhouse, including the steepest drop in exports in six years, fuelled fears about a slowdown. Thus, the ECB is likely to alter the scale of QE at its December meeting, when its latest economic forecasts will be available.
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