In its first meeting under the leadership of Christine Lagarde, the European Central Bank kept it interest rates unchanged at historic lows of -.0.5 percent. The decision was largely expected, and did little to move currency markets. The interest rates will remain at this level until the inflation outlook reaches close to, but still below, the 2 percent inflation goal.
The ECB is currently purchasing 20 billion euro of assets monthly with newly-created money, and today’s news release raised expectations for the bank to keep this program running “for as long as needed.” Analysts predicted that Lagarde would keep rates steady in an effort to avoid deflecting from former ECB head Mario Draghi’s late-term policy so early into her tenure at the ECB.
The dollar surged against the British pound with the sterling falling 0.17 percent against the greenback as of 1:05 p.m. HK/SIN. The sterling was trading at $1.3171. The dollar was also up against the yen, trading 0.06 percent higher at 108.60. The euro maintained its edge over the dollar that began during the Asian session, trading up 0.03 percent against the dollar to $1.1131.
On the commodity markets, oil prices headed higher after a day of declines on Wednesday. U.S. WTI futures were trading up 0.61 percent to $59.12 per barrel while Brent crude futures spiked 0.78 percent to $64.22 per barrel. Gold futures were also higher, trading up 0.26 percent to $1,479.40 per ounce. These assets are especially sensitive to the trade concerns between the United States and China, and with the next tariff deadline approaching, traders are mostly staying to the side and waiting to see how U.S. President Donald Trump will handle the deadline. Trump is scheduled to have meetings today with his top trade advisors about whether to remain firm on the deadline or to extend the deadline in the hope of resolving the issues with China. A firm deadline will likely send oil prices lower as it can signal a decrease in demand, but gold prices will likely head higher as traders will remain worried about global growth prospects if the trade war rages on.