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ECB is more upbeat on Eurozone outlook
THE European Central Bank (ECB) did not announce any change to monetary policy yesterday and gave no indication rates would be tightened.
The ECB acknowledged it had probably been too pessimistic in its outlook and was more upbeat about the Eurozone’s near-term prospects.
ECB president Jean-Claude Trichet said that in the near term, the Eurozone should continue to benefit from a recovery in exports and the stimulus. Separate purchasing managers’ data showed that Eurozone activity grew modestly in August.
But the central bank remained cautious. Lombard Street Research’s Gabriel Stein said Trichet was right to be dovish as “the recovery is not strong enough to start withdrawing the monetary stimulus”.