ECB President Trichet, in an interview with an Italian newspaper, has indicated there is still leeway for lower euro zone rates saying “As regards the main refinancing operation rate, I did not exclude that we could, in a very measured way, go down from the present level.”
Trichet echoed his recent statement that the ECB’s deposit rate, currently acting as a floor for money market rates, was unlikely to fall further. He also reiterated his promise that the ECB will lay out plans for possible unconventional monetary policy measures at its next meeting on May 7.
On forex rates, Trichet said “In this area, it is important for all players to be highly responsible” i.e we don’t want a load of competitive devaluations.
He went on to praise various US officials for their comments regarding a strong dollar being in the interests of the US.
