It is expected that on Thursday, the European Central Bank will declare the intentions to preserve its key interest rate below zero for another one year, increasing the gap with the Fed, which plans to further increase.
The discrepancy between the two leading central banks reflect the separation of economic views that strengthened the recent statements by Donald Trump. He expressed his discontent with the Fed solutions and reproached Chinese and European officials in the weakening of their currencies. Many central banks perceived such political interference as a dangerous encroachment on their independence.
Since the beginning of this year, the euro fell in relation to the dollar from 1.25 to 1.17 after the ECB reduced the interest rate to -0.4%, which helped support the company focused on exports, and also soften any influence on financial markets from — The Bank’s decision on the phased refusal to buy bonds in the amount of € 2.5 trillion. At the same time, the Fed indicator is in the range of 1.75% to 2% and a further increase of up to 4% is expected to keep up with the pace of economic development of the country.
Last month, the ECB made it clear that it does not plan to raise the rate, at least until the next summer. It is expected that on Thursday, the Chairman of the Bank Mario Dragi will affect the topic of trade and currency wars, and officials will focus on caution.
Previously, we wrote that according to the published macroeconomic report of Alfa-Bank