LONDON — The euro fell sharply on Thursday after the European Central Bank said it would monitor the currency’s value and economic impact, while global stock markets tracked lower after Wall Street’s open.
After the ECB kept interest rates on hold, as expected, President Mario Draghi told reporters at a press conference that the bank would “want to see if the (euro’s) appreciation will alter our assessment as far as price stability is concerned.”
Although he indicated no concrete action, the comment fueled market speculation that the strong euro, which could cause an excessive drop in inflation, might make the ECB more likely to cut interest rates in coming months. Lower rates tend to weaken a currency.
The 17-country euro lost all its previous gains to tumble 1.1 percent lower to $1.3383.
Stock markets soon also dropped with Britain’s FTSE 100 sliding 1.1 percent to 6,228.42 and France’s CAC 40 falling 1.2 percent to 3,601.005. Germany’s DAX fared slightly better, ending 0.1 percent higher, at 7,590.85, thanks to upbeat corporate news from carmaker Daimler.
Read More at OfficialWire . By Carlo Piovano.