Euro edges lower after ECB leaves policy unchanged

Last Thursday, the Euro inched down against its US counterpart after the European Central Bank (ECB) left its interest rates and policy stance unchanged, keeping its unprecedented stimulus in place as inflation remains below target.

The ECB kept its bias for further policy easing, leaving the door open to further rates cuts or a rise in asset buys. This is in line with market outlooks but at odds with calls from Germany, the Euro zone’s economic powerhouse, for a gradual reduction of stimulus ECB President Mario Draghi said that the Euro zone’s economy continues to improve and faces fewer dangers. He said that the risks to the economy remained primarily negative but that “downside risks have diminished”.

Last Friday, the Swedish Crown steadied after slipping against the Dollar a day earlier, after the Riksbank extended its Bond buying program and delayed future rate hikes despite strong domestic growth and cautious optimism about global economy activity. The Riksbank kept its benchmark interest rate at -0.50%, but pushed out its forecast for when rates may rise to the middle of 2018, hoping to underpin an uncertain pick-up in inflation.

After a rally in the first half of April, Oil is set to start the month back below $50 a barrel as American production has expanded to the highest since August 2015. OPEC Secretary-General Mohammad Barkindo said last Thursday that local stockpiles increased by less than average during Q1 and compliance to supply cuts were at 98% in March. Putting pressure on the group is Libya, which is exempt from the curbs; it has restarted output at its largest field and plans to restart another facility.