9 C
New York
Monday, October 18, 2021

Euro sags as rates held steady

Euro sags as rates held steadyLONDON: The euro slid back under $1.18 on Thursday after the ECB held interest rates and kept the easy money spigot open despite hiking its growth forecast for the eurozone.

Meanwhile US stocks added to records following solid US retail sales data and as Disney advanced following a mammoth acquisition of key 21st Century Fox assets.

The European Central Bank, as expected, left its headline interest rates unchanged at historic lows, including the main refinancing rate pegged at zero, and kept its huge support for the eurozone economy in place.

But it significantly lifted its eurozone growth forecasts, expecting to see the economy expand 2.4 percent this year, 2.3 percent in 2018 and 1.9 percent in 2019.

However inflation is not expected to return to its optimal level of just under 2 percent, with the ECB saying it expects consumer prices to rise 1.7 percent in 2020.

The euro came “…under pressure as the ECB Chief Mario Draghi left the option on the table for extra monetary easing” said market analyst David Madden at CMC Markets UK.

The weaker euro didn’t help eurozone stocks. Frankfurt’s DAX 30 ended the day down 0.4 percent, while the CAC 40 shed 0.8 percent.

The Bank of England also kept its key interest rate at 0.5 percent, though it said it was keeping an eye on Britain’s Brexit-fuelled inflation.

“Although inflation in the United Kingdom has jumped to its highest level in almost six years, it seems that the growing uncertainty over Brexit is likely to encourage the central bank to adopt a wait-and-see approach moving forward,” said Lukman Otunuga, an analyst at the FXTM currency trading firm.

London stocks fell 0.7 percent as investors looked past official data showing that retail sales rebounded 1.1 percent in November from October, buoyed by Black Friday price reductions.

– Retail sales cheer Wall Street –

Wall Street added to records, with the Dow up 0.8 percent in late morning trading, after data showed US holiday shopping season got off to a robust start in November.

And total retail and food service sales were up 0.8 percent on October, with American consumers plunking down $492.7 billion, according to the seasonally adjusted figures. The result handily overshot analyst expectations, which called for an increase of just 0.3 percent.

Republican lawmakers from the House of Representatives and the Senate, meanwhile, are racing to reconcile their versions of a tax overhaul to send to President Donald Trump for signing into law before the holidays, seen as a boon for traders.

Dow member Disney gained 0.5 percent after unveiling $52.4 billion stock deal to buy key Fox Hollywood film and television studios, among other businesses.

The deal brings popular entertainment properties including X-Men, Avatar, The Simpsons, FX Networks and National Geographic into Disney’s portfolio. Fox dipped 0.1 percent.

Asian stocks mostly fell Thursday as traders ignored another record finish for the Dow on Wall Street and eyed gyrations in the dollar.

Copyright AFP (Agence France-Press), 2017

Source: Brecorder.com

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles

Popular Articles