The Euro to Pound exchange rate was virtually unmoved on Thursday after the European Central Bank chose to maintain interest rates at 0.25%; investors had raised their bets that the ECB would take steps to ease concerns over weak inflation in the Eurozone.
Despite the mounting concerns over the threat of deflation the ECB resisted the urge to announce new stimulus measures to help bolster growth and aid the Eurozone’s weak economic recovery. The board voted to leave interest rates at 0.25%, leave the marginal lending facility unchanged at 0.75% and leave the deposit facility at 0%.
Inflation in the 18-member Eurozone fell to its lowest level since 2009 on Monday, increasing concerns over the risk of deflation.
The decision did little to quell expectations that action will be taken at some point.
“All instruments that fall within the mandate, including Quantitative easing are intended to be part of this statement. There was in fat, during the discussion we had today, there was a discussion of QE,” President Draghi said at the press conference which followed the rate decision. He added that the council was unanimous in the commitment to use all unconventional tools within their mandate to cope with low inflation.
Against the US Dollar the Euro advanced to a session high due to the release of worse than forecast jobless claims data and an unexpected widening of the USA trade deficit.
The Pound was weakened earlier in the session after Markit’s Services PMI report, service sector activity in the UK fell to its lowest level in nine-months.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3781 ,
Euro,, Pound Sterling,0.8301 ,
Euro,,Australian Dollar,1.4917 ,
Euro,,Canadian Dollar,1.5184 ,
[/table]
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