May 6, 2010
Trichet, ECB May Have To Get Drastic To Solve Financial Crisis
The European Central Bank is expected to hold its benchmark interest rate steady at 1.00% this morning. In addition, look for it to issue a statement saying that rates
will remain low for quite some time because of the fiscal problems in several Euro Zone nations and the risk of contagion.
Because so much money is being set aside to bailout Greece and additional funds may be needed to support the economies of Spain and Portugal, the ECB cannot afford at
this point to begin raising interest rates without risking a possible double-dip recession.
With a few major nations raising rates or set to raise their benchmark rates in the near future and the ECB set to hold rates steady, traders will continue to sell the
Euro because of the interest rate differential.
Following the release of the ECB policy statement, President Jean Claude Trichet is expected to try to instill confidence in the Euro during …
