The European Central Bank (ECB) has announced it is holding its base rate of interest for another month, although the head of the body Mario Draghi has hinted rises are on the way.
At a press conference held after the ECB said rates are being held for another month, Mr Draghi stated that the central bank is "not resigned" to keeping a low rate of inflation.
The target rate of inflation has been set by the ECB at two per cent, but it currently stands at 0.7 per cent. Interest rates in Europe are currently at an all-time low and Mr Draghi has previously indicated a willingness to increase them sooner rather than later, although he is in no rush.
Last month, Mr Draghi stated that a clearer picture of the ECB's future economic policy is likely to emerge in June, which might be a hint to investors of when a rate rise could be implemented.
Mr Draghi stated at the press conference that the 24-member ECB council was "dissatisfied about the projected path of inflation" and is "not resigned to have too low inflation for too long a time". He added that the ECB was "comfortable with acting next time", raising expectations among commentators that the bank could alter policy in June.
Luke Bartholomew, investment manager at Aberdeen Asset Management, told BBC News: "ECB meetings are starting to have a Waiting for Godot feel: every month we think Draghi can't go any longer without doing something and every month we're left waiting."
Following the comments made by Mr Draghi yesterday (May 8th), the euro fell to below $1.39. Earlier in the day, the single currency had increased to the $1.40 mark for the first time in more than two years.
Interest rates have also been held by the UK this month, with the Bank of England's Monetary Policy Committee announcing the base rate is to remain at 0.5 per cent for another month. This is a record low for the UK.
Find up to date information on the FTSE 100 and spread betting strategies at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.