Europe’s main stock markets rose and the euro slumped on Thursday after the European Central Bank said it would review its monetary policy stance in December, raising expectations of more economic stimulus in the Eurozone, the AFP reported.
“The degree of monetary policy accommodation will need to be re-examined at our December meeting,” ECB chief Mario Draghi told a news conference, after the guardian of the euro held its key interest rate unchanged at 0.05 per cent.
For now, the ECB council meeting in Malta on Thursday took no new measures to boost chronically-weak inflation in the 19 countries that share the euro, with Draghi adding that “inflation rates will remain very low in the near term”.
Draghi’s comments sent eurozone markets soaring. Frankfurt’s DAX 30 jumped 2.48 per cent to close at 10,491.97 points and the Paris CAC 40 gained 2.28 per cent to 4,802.18 points compared with Wednesday’s close.
“As expected his (Draghi’s) repeated mantra about the ECB implementing additional stimulus measures if needed, as a tool to promote economic growth within Europe was approved by market participants,” said FXTM research analyst Lukman Otunuga.
London’s benchmark FTSE 100 index edged up 0.44 per cent to finish at 6.376,28 points, with traders mostly brushing aside upbeat British retail sales data.
In foreign exchange deals, the ECB’s comments sent the euro, tumbling to $1.1156 from $1.1339 late on Wednesday in New York.
“Mario Draghi’s extremely dovish comments hit the currency markets like a double espresso – jolting them out of the torpor with which they had greeted the ECB’s decision to hold interest rates,” said David Lamb, head of dealing at foreign exchange specialists FEXCO.
“Such a strong signal that the European money presses will be set rolling again soon has sent the euro slumping.”
Source : Punch