Draghi encouraged investors & kept rates unchanged

European Central Bank President Mario Draghi considered that it is too early to assess the repercussions of the British vote in favor of their country’s exit from the European Union on the fragile economic recovery in the euro zone.

Officials kept the benchmark interest rate at zero, the interest rate on deposits at 0.4% and asset purchases at 80 billion euros (88 billion dollars) a month, as expected in a Bloomberg survey. Euro currency touched 1.1047 immediately after Mario Draghi’s remarks.

Economists have slashed their forecasts for growth in the euro zone since the British referendum on June 23 that led to growing fears of a global economic slowdown.

Draghi told European Union leaders last month that a vote in favor of Britain’s exit may reduce the growth of the euro zone about 0.3 to 0.5% compared to the previous estimates for the next three years.

The US dollar trading little changed against its Canadian counterpart on Thursday, as sentiment was lifted briefly after European Central Bank President Mario Draghi’s remarks.

USD/CAD fell to 1.3026 during early US trade, the lowest price of the session, and the pair subsequently consolidated at 1.3059.

Investors were encouraged by European Central Bank president’s comments, which stated that the European markets have survived after the market volatility. The comments came after the central bank left its monetary policy unchanged, as policy makers try to assess the economic consequences of the decision of Britain to leave the European Union.

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