Commenting on the Eurozone economic outlook, the European Central Bank (ECB) policymaker Yannis Stournaras said that the “economy is still fragile” while adding that “there is no risk of high inflation era.” “See no reason to change pace of PEPP purchase programme.” “Too early to shift from PEPP to APP.”
Christine Lagarde, President of the Europen Central Bank (ECB), said on Friday that she believes that the euro area is in a recovery process, as reported by Reuters. "The recovery is uncertain." "The inflation rise this year is temporary."
European Central Bank (ECB) chief economist Philip Lane was out with some comments in the last hour, saying that a lot of the inflation rise now is the unwinding of downside shocks of last year.
The European Central Bank (ECB) decided to leave the interest rates on the main refinancing operations, the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively, as expected.
Euro boom? Not so fast, as everything is slower in Europe, but the European Central Bank has acknowledged improving conditions in its subtle manner. Lagarde has released three relevant statements that may keep the euro bid – and potentially send it to new highs.
The European Central Bank (ECB) decided to leave the interest rates on the main refinancing operations, the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively, as expected.
Christine Lagarde's largesse is gone – at least for the long-term – and that is bad news for euro bulls. European Central Bank President Christine Lagarde has overseen an announcement to expand bond-buying in the second quarter.
The European Central Bank (ECB) decided to leave the interest rates on the main refinancing operations, the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively, as expected.
Subtle changes to language can be meaningful to EUR/USD traders – the European Central Bank has left its interest rates unchanged but seems more upbeat, allowing EUR/USD to rise. Here are three changes that have pushed the common currency higher and may continue doing so.
AUD/USD wobbles around 0.7680-90, off a weekly low, as it begins the key Wednesday comprising the US Federal Open Market Committee (FOMC) meeting. Other than the pre-Fed caution, mixed data from the US and a light news feed also contribute to the pair’s latest sluggish performance.
The precious metals sector struggled overnight as investors position for a possible shift in monetary policy from the Fed. Gold prices were down some 0.4% in the final part of the North American day as the US dollar firmed ahead of the outcome of the Fed’s two-day meeting on Wednesday.
EUR/USD remains on the back foot, receding taking rounds to 1.2120-25, amid a sluggish Asian session trading on Wednesday. Sellers to keep reins as unless prices cross three-week-old resistance line. Easing bullish bias of MACD adds to the downside signals.
SHIB price faces stiff resistance ahead. Shiba Inu has had a difficult time recovering, suggesting that it may soon face rejection. In the following video, FXStreet's analysts evaluate where SHIB price could be heading next as Shiba Inu gets weaker.
The outcome of Wednesday’s Federal Reserve monetary policy announcement could set the stage for how the U.S. dollar and currencies trade over the next month. With that in mind, the greenback maintained its bid ahead of rate decision.
The European Central Bank is the central bank empowered to manage monetary policy for the Eurozone. With its beginnings in Germany 1998, the ECB is empowered to maintain price stability in the euro area, so that the euro’s purchasing power is not eroded by inflation. As an entity independent of individual EU countries and EU institutions, the ECB aims to ensure that the year-on-year increase in consumer prices is less than, but close to 2% over the medium term. Another of its tasks is the one of controlling the money supply. This involves, for example, setting interest rates throughout the euro area. The European Central Bank’s work is organized via the following decision-making bodies: the Executive Board, the Governing Council and the General Council. Christine Lagarde is the President of this organism since November 1st 2019. Her speeches, statements and declarations are an important source of volatility, especially for the Euro and the currencies traded against the European currency.
The Official Website, on Twitter and YouTube
Christine Lagarde was born in 1956 in Paris, France. Graduated from Paris West University Nanterre La Défense and became President of the European Central Bank in November 1st 2019. Prior to that, she served as Chairman and Managing Director of the International Monetary Fund between 2011 and 2019. Lagarde previously held various senior ministerial posts in the Government of France: she was Minister of the Economy, Finance and Industry (2007–2011), Minister of Agriculture and Fishing (2007) and Minister of Commerce (2005–2007).
Prior to the Rate Decision:
After the Rate Decision:
The decision always has an effect on the Euro.
When the interest rate is increased the European Central Bank is literally selling government securities to large financial firms. In turn, the financial organizations are paying in Euros for these securities. This effectively decreases the amount of currency circulating in the economy. A decreasing supply leads to higher demand, and therefore causes the value of the Euro to appreciate.
When the interest rates are decreased, the European Central Bank floods the market with Euros. This is done by the purchasing government securities from financial organizations. In return for the securities, these banks and financial deals are paid in Euros, therefore increasing the supply of Euros in the economy. As supply increases, the value of the Euros depreciates.
The World Interest Rates Table reflects the current interest rates of the main countries around the world, set by their respective Central Banks. Rates typically reflect the health of individual economies, as in a perfect scenario, Central Banks tend to rise rates when the economy is growing and therefore instigate inflation.
In practical terms, QE means that central banks create money out of nothing to buy securities, such as government bonds. This new money swells the size of bank reserves by the quantity of assets purchased and that’s why this programme is called Quantitative Easings. The money supply is intended to flood financial institutions with capital in an effort to stimulate lending and increase liquidity.
Much of the governments’ debt is held by banks in the Eurozone and the ECB wants them to give more credits. If the European Central Bank buys government bonds, their prices rise and profitability drop even more. This is a liquidity-providing operation that weakens the value of the euro. This depreciation makes European exports cheaper and competitive, and ultimately, helps in recovering. In addition, as a result of the stimulus to internal and external consumption, the ECB combats the risk of deflation, a widespread and prolonged drop in prices, as well as the high unemployment.
The long term refinancing operation (LTRO) is a cheap loan scheme for European banks that was announced by the European Central Bank towards the end of 2011 in a bid to help ease the eurozone crisis.
Round one was carried out on 21 December, when banks took €489 billion from the European Central Bank. The loans are due to be repaid within three years at a rate of 1%, and a second round will be launched on 28 February, with the results of how much money was requested due on 29 February.
As the eurozone crisis has escalated, banks have become less stable and have less money to lend. The objective of the LTRO is to boost cash flow in the market and avoid a severe credit crunch or collapse of the banking system.
