Draghi's Statement Results in Rising Stock Indices in Europe on Thursday
Without any support from the United States, where Wall Street was closed due to the 4th of July festivities, stock indices in Europe found their way up. President of the European Central Bank, Mario Draghi, caused positive market sentiments after stating that the interest rate will remain low for a long while and that the current monetary (easing) policy will remain unchanged. Stock indices in Germany, France, Great Britain and the Netherlands went up between 2.1 and 3.1 percent on Thursday's trading day (04/07).
The European Central Bank (ECB) kept its key interest rate at 0.5 percent. Although Draghi did not mention at what point in the future the interest rate will be altered, he indicated that a downward adjustment is more likely than a higher interest rate in the foreseeable future. He stressed that the policy is based on the development of inflation, the economy and credit loans in the Eurozone. It was the first time that the ECB shared some insight into its future interest policy.
Draghi said that the European economy is expected to stabilize this year but future forecasts remain gloomy. Economic growth may fall below current expectations. The Euro weakened after Draghi's statements to 1,2920 against the US Dollar from 1,3010 on Wednesday.