European Central Bank Expected to Hold Firm on Interest Rates
Written by admin on Wednesday, May 7th, 2008 in Trading.
In similar fashion to what is expected of the Bank of England tomorrow, the European Central Bank is expected to hold interest rates at 4% showing a reluctance to cut rates amid high fuel and food prices pushed inflation to 3.6% in March.
Possible rate cuts later this year are possible as the Euro economy continues to slow.
The ECB has held interest rates at 4% since the credit crunch began, a move that contrasts with that of the FED who have slashed interest rates from 5.25% to 2% since summer 2007.
As a result of ECB moves the Euro is at a record high against the Greenback making Euro exports expensive.
As fears of inflation throughout the EuroZone are quelled the ECB is expected to cut interest rates, and as consumer confidence returns to US markets the Greenback is expected to start to peg back the Dollar.