Euro slides as ‘downbeat’ ECB warns on economy

AFP – The euro slipped on Thursday after the European Central Bank trimmed its growth forecast for the eurozone because of "mounting uncertainties" from within and outside the region.

ECB chief Mario Draghi said risks facing the area were now "moving to the downside," although that did not stop the bank from pulling the plug on its massive crisis-fighting economic stimulus known as quantitative easing, or QE.

"While Mario Draghi was boxed in by previous announcements about QE, his press conference revealed two stark truths –- he remains deeply concerned at the fragility of eurozone growth and reserves the right to administer further monetary stimulus," said JR Zhou, market analyst at online trading platform Infinox.

David Madden of CMC Markets, said "downbeat Draghi" weighed on the single currency.

Under its quantitative easing program, the ECB pumped 2.6 trillion euros ($3.0 trillion) into the eurozone economy in order to stoke growth and inflation.

Europe’s major stock markets, meanwhile, held mostly steady, with "dealers still hopeful that Beijing and Washington DC are on the road to striking a deal" on trade, Madden said.

In New York, Wall Street had an indecisive day and the major indices eked out a split finish after bouncing between the black and the red — continuing a streak of volatility sparked by the US-China trade war and geopolitical turmoil.

The Dow rose 0.3 percent but the tech-heavy Nasdaq fell 0.4 percent.

General Motors also sank 1.6 percent after US President Donald Trump again lashed out at the company and its CEO Mary Barra, renewing criticism of plans to cut jobs and close US manufacturing plants.

Elsewhere, the pound pushed higher, a day after British Prime Minister Theresa May won a vital confidence vote amid widespread discontent at her Brexit deal.

Advertisement

 

 

 

"Our view is that a ‘no-deal’ Brexit remains quite unlikely, despite all the recent political upheaval," Capital Economics said.

"With this in mind, we think that the risks are skewed to the upside for sterling."

Asian equities posted more gains as investors were cheered by conciliatory noises from China and the United States on trade.

While the tariffs row between Beijing and Washington is far from being resolved, there is a lot more optimism on trading floors that the world’s top two economies can make headway in talks during their three-month truce.

Dealers mulled a report that Beijing was considering replacing its "Made in China 2025" program that aims to boost its technology sector, a key point for Washington.

That followed news China had agreed to resume importing soybeans — a major boost for US farmers — as well as remove a levy on US autos imposed earlier this year in response to Donald Trump’s initial tariffs.

But US officials vow they will remain tough in the negotiations, and will "trust but verify."

– Key figures around 2130 GMT –

New York – Dow: UP 0.3 percent at 24,597.38 (close)

New York – FLAT at 2,650.54 (close)

New York – DOWN 0.4 percent at 7,070.33 (close)

London – FTSE 100: FLAT at 6,877.50 points (close)

Frankfurt – DAX 30: FLAT at 10,924.70 (close)

Paris – CAC 40: DOWN 0.3 percent at 4,896.92 (close)

EURO STOXX 50: UP 0.1 percent at 3,112.17 (close)

Tokyo – Nikkei 225: UP 1.0 percent at 21,816.19 (close)

Hong Kong – Hang Seng: UP 1.3 percent at 26,524.35 (close)

Shanghai – Composite: UP 1.2 percent at 2,634.09 (close)

Pound/dollar: UP at $1.2660 from $1.2629 at 2200 GMT

Euro/dollar: DOWN at $1.1361 from $1.1369

Dollar/yen: UP at 113.61 yen from 113.29 yen

Oil – Brent Crude: UP $1.30 at $61.45 per barrel

Oil – West Texas Intermediate UP $1.43 cents at $52.58

Latest Comments

Your email address will not be published. Required fields are marked *