Thursday 11th March 2021 - 13:15 (GMT)
The European Central Bank (ECB) struck a dovish tone following the conclusion its latest 2 day meeting in Frankfurt, Germany. As expected, policymakers decided to leave the EU deposit facility rate unchanged at -0.50% and its marginal lending facility at 0.25%.
It also committed to accelerate the pace of its bond buying programme but stopped short on adding to the already sizeable €1.85 trillion fund. However, the bank did reiterate that the programme could be further expanded or not used in full, depending on its progress in stimulating a recovery in output and inflation.
The ECB had recently slowed the pace of its bond purchases, even as yields in most european countries has risen. For example, its bond holdings increased by €11.9 billion last week, down from €12 billion a week earlier. For comparison, on an average week the bank had been buying bonds worth more than €18.1 billion.
The euro continued to weaken following the news and remained on course to test key levels of resistance against both the pound and US dollar.
Elsewhere, concerns of runaway inflation were eased yesterday as data released by the Bureau of Labor Statistics showed US consumer prices rose by 1.7% in February. This was in line with expectations and led to fresh all-time highs on the Dow Jones as risk appetite continues to flow back into global markets.
