The Euro gained against the Dollar on Thursday, erasing earlier losses after the European Central Bank launched a new stimulus package. The European Central bank cut its deposit rate to a record low of -0.5% from -0.4% and will restart bond purchases of 20 billion Euros a month from November. The Eurozone’s main interest rate has remained unchanged at zero.
This move comes as the ECB is trying to combat slow economic growth in the Eurozone. The bank said its asset purchase programme would “run for as long as necessary,” while interest rates would remain “at their present or lower levels” until Eurozone inflation reached its target rate of 2%. ECB Chief, Mario Draghi, told reporters that the inflation outlook had been further downgraded and expects inflation to decline before rising again towards the end of the year.
Mr Draghi also announced that the ECB had lowered this year’s and next year’s GDP growth forecasts for the Eurozone. It now expects growth of 1.1% this year and 1.2% in 2020. He said the Eurozone was suffering from the “prevailing weakness of international trade in an environment of prolonged global uncertainties,” in reference to Brexit and global trade tensions.
Labour has urged Parliament to be recalled after no-deal Brexit papers are released. Labour has said that it is more important than ever that Parliament is recalled after the government published an assessment of the possible impact of a no-deal Brexit. Shadow Brexit Secretary, Sir Keir Starmer, said the Yellowhammer document confirms there are “severe risks” if the UK leaves the EU without a deal. The risks the UK face if they leave the EU are a decrease in certain types of fresh food, increase in prices of food and fuel, disruption lasting up to six months affecting medical supplies, protests in the UK and lorries waiting more than two days to cross the English Channel. Sir Kier said recalling Parliament would allow MPs the opportunity to stop these risks by stopping a no deal Brexit.
Lastly, the Prime Minster has denied lying to the Queen about the advice he gave her over the five week suspension of Parliament. When he was asked whether he had lied to the monarch about his reasons for the suspension, he replied: “Absolutely not.” He added: “The High Court in England plainly agrees with us, but the Supreme Court will have to decide.”
1:30 – USD: Core Retail Sales m/m – Forecast at 0.1% from previous 1%.
1:30 – USD: Retail Sales m/m – Forecast at 0.2% from previous 0.7%.