European Central Bank policymakers are open to cutting the ECB's policy rat...
FUKOKA, Japan/FRANKFURT, Germany - European Central Bank policymakers are open to cutting the ECB’s policy rate again if economic growth weakens in the remainder of the year and a strong euro hurts a bloc already bearing the brunt of a global trade war, two sources said.
The apparently mixed message failed to convince some investors, who saw it as too tenuous a commitment to more stimulus. This sent the euro rallying to a 2-1/2 month high of $1.1347 against the U.S. dollar. In this context, countering the euro’s strength, rather than lowering already rock-bottom borrowing costs, would be the main reason for a further cut to that deposit rate, one of the sources said.
The source said a euro at $1.15 would still be tolerable for some but $1.20 would be a critical level to watch. The argument for more quantitative easing from the ECB was less clear to some policymakers, however, the sources said.
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