ECB Keeps Interest Rates Unchanged — Euro Rises

The euro surged today after the European Central Bank held the interest rates unchanged. The 16-nation shared European currency now declines versus the US dollar and the Japanese yen.

The Governing Council of the ECB decided at today’s meeting that the interest rate will remain unchanged at 1.00 percent.
Jean-Claude Trichet, the president of the European Central Bank, said in his statement:

Overall, the current monetary policy stance remains accommodative. The stance, the provision of liquidity and the allotment modes will be adjusted as appropriate, taking into account the fact that all the non-standard measures taken during the period of acute financial market tensions are fully consistent with our mandate and, by construction, temporary in nature.

The euro may continue to rise against the dollar for some time but the analysts say that the gains should be limited. The concerns for the economy of the European Union haven’t gone away and may subdue the EU currency.

EUR/USD traded at 1.4216 today as of 17:35 GMT after opening at 1.4130 and climbing to 1.4281. EUR/JPY trade near its opening level of 114.63, after it jumped to 115.41.

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