Permanent ECB board member Bini Smaghi says that the coordinated rate cut earlier this was the right decision. Slowing GDP is is a concern, he says, straying from the ECB’s price stability mandate.
Yesterday, President Trichet suggested another rate cut could be in store at next weeks regular monthly meeting. We’d guess they’ll make it another 50 bp cut.
EUR/USD trades in range-bound fashion as the dollar eases as risk aversion recedes slightly. USD/JPY is the exception, trading firmly on hopes for a Japanese rate cut.
