FOREX-Euro falls versus dollar, yen on ECB rate cut hope
* ECB holds rates at 0.75 percent, cuts inflation, growth outlook * ECB President Draghi says wide discussion on rates * Political tensions on Italy grows By Wanfeng Zhou NEW YORK, Dec 5 (Reuters) - The euro fell against the dollar and yen on Thursday after comments from the head of the European Central Bank and a downgrade to the region's growth and inflation forecasts boosted expectations of an interest rate cut. Political tension in Italy added to pressure on the euro. Italian Prime Minister Mario Monti on Thursday faced a revolt by Silvio Berlusconi's PDL party, which ratcheted up tension ahead of an election early next year by walking out of a Senate confidence vote. ECB President Mario Draghi, speaking at a press conference after the bank's decision to keep its main interest rate at 0.75 percent, said there was a wide discussion on interest rates, but the consensus was to leave the rates unchanged. "The euro is slumping against both dollar and yen and we attribute this to Draghi's comments that there was a wide range of discussion over what to do with interest rates today," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. LLC. in New York. "That comment suggests that there was a body of support for easing monetary policy and so the market is looking to the next meeting as perhaps a time to seek a cut." Draghi also said policymakers discussed negative deposit rates, but he did not elaborate further. The ECB also lowered its growth and inflation forecast and said that risks to growth remain on the downside. "The combination of the ECB's cooler growth and inflation forecasts opened the door to a rate cut in the months ahead," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. The euro fell as low as $1.3021 on Reuters data and was last down 0.3 percent to $1.3033. It also lost 0.4 percent to 107.33 yen. The dollar slipped 0.2 percent to 82.35 yen.
- Tweet this
- Share this
- Digg this
- U.S. nurse quarantined over Ebola calls treatment "frenzy of disorganization"
- Google executive sets new stratosphere skydive world record
- Wall Street finally turning on Amazon as Bezos magic fades
- Former Cream frontman Jack Bruce dies aged 71
- São Paulo running out of water as rain-making Amazon vanishes
Finance Minister Arun Jaitley favours a cut in interest rates to trigger demand in the construction sector, a newspaper report said on Saturday, but the Reserve Bank of India (RBI) has signalled it will not ease policy until it is confident of lower inflation. Full Article
Euro zone risks "relapse into recession" without structural reforms - Draghi. Full Article
Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw” Full Article