Euro is stable after the ECB’s rate decision

03.09.2015

On Thursday, the euro is traded steadily against the dollar after the European Central Bank kept interest rates on previous levels, while investors await the press conference of the bank at the end of the committee meeting.

EUR/USD was traded at 1.1232, virtually unchanged throughout the day.

The ECB left its key interest rate at a record low 0.05%, in line with expectations.

The central bank kept the marginal rate at 0.30% and the deposit rate at 0.20%.

Later on Thursday, the ECB is expected to reduce the inflation prognosis due to the ongoing decline in oil prices and slowing economic growth in China, while President Mario Draghi will hint at the possibility of further incentives to accelerate inflation.

The annual rate of inflation in the single currency bloc rose in August by 0.2%, unchanged from the previous month, but slightly higher than the expected 0.1%, while the ECB's target mark was slightly below 2%.

Late last month, the ECB's chief economist, Peter Praet, warned that the risks of achieving the inflation target over the medium term have increased, and pointed out that the bank is ready to expand the program of incentives if necessary.

The ECB launched a program of quantitative easing with 60 billion a month in March, when there started the deflation in the Eurozone.

Euro keeps steady against the yen, EUR/JPY being traded at 135.05, and went up against the pound, with EUR/GBP rising 0.24% to 0.7350.

Meanwhile, the USD index, which shows the relationship of the US dollar against a basket of major currencies, was held at 95.84.

The dollar growth is limited on the eve of the report on non-farm payrolls United States, which is likely to determine the possibility of raising the interest rate by the Federal Reserve System in September.

The recent turmoil in global financial markets have generated uncertainty over the Fed's decision, whether the bank will refrain from raising rates in the upcoming policy meeting on September 17.

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