Business

No ECB rate rises until 'at least' the end of 2019 - Draghi

Share
European Central Bank monetary policy meeting and President Draghi

"The Governing Council expects the key European Central Bank interest rates to remain at their present levels at least through the end of 2019, and in any case for as long as necessary", the statement reads.

Draghi confirmed that the Frankfurt-based institution was considering measures to mitigate the impact of its negative deposit rates on banks as well as the pricing of new cheap two-year loans to banks. US President Donald J. Trump has also threatened the EU with tariffs on $11 billion worth of European Union products.

Separately, data showed United States consumer prices increased by the most in 14 months in March but underlying inflation remained benign against a backdrop of slowing global economic growth.

Policymakers in the USA have also backed away from raising rates this year.

The US-China trade war and the normalisation of monetary policy has led worldwide organisations, including the global Monetary Fund, to cut their growth forecast.

The dollar strengthened against a basket of currencies on Thursday on encouraging US inflation and labor data, while sterling weakened after the European Union allowed Britain to postpone its exit from the bloc for a second time.

Reckitt Benckiser Group Plc shares fell 6.5% to weigh on Britain's blue chip FTSE 100 index after the U.S. Justice Department accused Indivior Plc, a former RB unit, of illegally boosting prescriptions for its blockbuster opioid addiction treatment. On Wall Street, the S&P 500 added 0.35 per cent, the Nasdaq climbed 0.7 per cent while the Dow was barely changed.

Industrial stocks closed down a bare 0.01%, after shares pared losses following the Fed minutes, as Boeing Co shares continued to weigh.

But some Fed policymakers said they may want to nudge up rates if the U.S. economy keeps performing as expected.

"There is a persistent trend of inflation underperformance that may soon become problematic for the Fed", said Ian Lyngen, head of USA rates strategy at BMO Capital Markets in NY.

The euro recouped earlier losses.

The single currency was 0.13% lower at $1.12595 but was up 0.46% at 125.7yen.

Sterling traded at US$1.3095, unchanged on the day and staying in a triangle holding pattern between US$1.2945 and US$1.3380 during the past month or so.

Global benchmark Brent futures settled up $1.12 to $71.73 a barrel. A couple expressed concerns about the recent inversion of the USA yield curve as an omen for a slowdown.

USA gold futures settled 0.4% higher at $1,313.90 an ounce.

Share