Thursday, August 7, 2014

Euro little changed after Draghi rate pledge

The euro was little changed after the European Central Bank kept its monetary policy unchanged and President Mario Draghi said interest rates will stay at present levels for an extended period.

The euro traded at $1.3379 after sliding to $1.3333 yesterday, the weakest level since November 8. The euro-area recovery is moderate and uneven, and inflation expectations remain firmly anchored, Draghi told reporters in Frankfurt.

The euro has weakened more than 4 percent versus the dollar since May 8, when Draghi signaled policy makers would ease monetary policy the following month if needed. It extended losses since June 5, the day ECB policy makers lowered the refinancing rate and moved the deposit rate below zero for the first time.

The policy meeting comes against the backdrop of mounting political crisis. Russia has massed troops along its border with Ukraine and President Vladimir Putin retaliated yesterday against European Union and U.S. sanctions by ordering restrictions on food imports.

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