Michael Woolfolk, Managing Director and Senior Currency Strategist at BNY Mellon, says the euro will be on an uptrend, after the European Central Bank kept rates unchanged on Thursday.» Read More
European Central Bank President Jean Claude Trichet warned on Monday that the end of the credit crunch was not yet in sight and the world was experiencing an "ongoing and very significant market correction."
- Notes from an ECB groupie's travelog -
ECB policymaker Christian Noyer said on Tuesday that an explosive mix of soaring commodity prices and "permissive" monetary policy in some countries with dollar pegs could trigger an inflationary spiral which would hurt poor nations most.
European shares ended slightly lower on Thursday, weighed by financials after the region's top two central banks kept rates on hold as expected and investors saw little to suggest euro zone borrowing costs would fall soon.
The European Central Bank left its key interest rate unchanged at 4 percent on Thursday, as widely expected, and its president Jean-Claude Trichet warned on inflation pressures.
The European Central Bank will most likely do on Thursday what it has done every month since the credit crunch started last August: keep rates steady and talk tough on inflation.
The European Central Bank is widely expected to keep interest rates on hold at 4 percent on Thursday, but the opposing pressures of rising inflation and slowing growth could mean the central bank has to act before the year is out.
Euro zone inflation slowed more than expected in April, an early estimate showed, but economic sentiment also deteriorated faster than forecast, pointing to slowing economic growth.
The European Central Bank has to ask itself each month whether a rate rise is needed to control inflation, ECB Governing Council member Yves Mersch was quoted as saying in a newspaper report on Tuesday.
Wage and fiscal policy in the euro zone could buoy inflation and the European Central Bank may need to act on interest rates, ECB policymaker Axel Weber said in a newspaper interview released on Saturday.
The euro cannot replace the dollar as the world's main reserve currency, and a system of two reserve currencies would be unstable, billionaire investor George Soros said on Thursday.
Surging energy and food prices pushed euro zone inflation to a new high of 3.6 percent in March, boosting the euro to a record high against the dollar on fading chances of a ECB rate cut in the near term.
The Dow and S&P 500 snapped a two-day losing streak Thursday, led by technology stocks after an upgrade on the chip sector.
Stocks advanced Thursday, helped by an upgrade on the chip sector and increased forecasts from two Dow components.
European stocks ended lower for the third straight session on Thursday but well off the day's lows as strong gains on Wall Street sparked a late recovery, eclipsing fears of more asset writedowns in the banking sector.
Stocks opened higher Thursday after a better-than-expected report on jobless claims, and raised outlooks from Dow components DuPont and Wal-Mart.
The European Central Bank kept rates on hold at 4 percent, as expected, on Thursday, sticking to its mandate to fight inflation at any cost. Economists now think the possibility of monetary easing is more likely as late as the fourth quarter.
Wall Street banks are the first to be blamed for the credit crunch. Central banks come a close second, but as the Federal Reserve's image is suffering, the European Central Bank looks as solid as a rock.
The European Central Bank's mission to fight inflation prevents it from worrying about economic weakness. But an abrupt slowdown could anger politicians and endanger the central bank's very mandate.
Deepening concern over the state of the U.S. economy and its impact on Europe will lead to further uncertainty in European stock markets next week, as investors look to interest-rate decisions from major central banks for reassurance.