At the beginning of the press conference, ECB President Mario Draghi has confirmed the central bank decision of cutting the deposit rate to -0.5 percent and announcing new stimulus program.
Draghi also stressed that interest rates would remain low until inflation has strongly picked up near the 2 percent target.
Today’s “comprehensive package of monetary policy decisions” will provide the firepower needed to ensure that financial conditions remain “very favorable,” Draghi said.
He blamed the latest blow to euro area growth, more specifically the manufacturing sector, to the global trade tensions, led by the trade woes between the U.S. and China.
Now, the ECB predicts euro area growth of 1.1 percent rise this year, down from June’s estimates of 1.2 percent expansion. For 2020, the economy will growth by 1.4 percent, down from the latest projections of 1.4 percent.
The bank’s new estimates do not include a hard Brexit, even though it has become more likely recently, or a deeper trade war, he mentioned.
Lower growth and inflation since June, along with the “persistence of downside risks” were the key factors behind the ECB today’s move.
Finally, he reiterated that European governments to should boost their fiscal policy, highlighting that there was unanimity that fiscal policy should become the main instrument.
As of 13:08 GMT, the euro traded lower at $1.0955, recovering slightly from the session’s bottom hit at $1.0926 that was very close to last week’s two-year low.
European shares, on the other hand, got a boost from the ECB’s announcement, as the Euro STOXX 600 ascended 0.46 percent to 391.52 points.
Germany’s 10-year bond yields fell 10.23 percent to -0.625 percent,
extending its fall from Wednesday peak of -0.527 percent.