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ECB extends its QE programme until March 2017 or beyond

The 25-member Governing Council, meeting in Frankfurt on Thursday, reduced the rate by 10 basis points to minus 0.3 percent. That’s in line with the move forecast by economists. Policy makers left the main refinancing rate and the marginal lending rate unchanged. On the following Press Conference, ECB President Mario Draghi  said that the ECB extends the asset purchase programme to run until March 2017 or beyond if necessary and in any case until the Governing Council sees an improvement in inflation.

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Sterling slightly higher in an uneventful morning trade

With no major data releases from the UK today, traders are still being focused on inflation concerns. The Bank of England expects inflation to remain low into 2016 before picking up toward its 2 percent target. BOE Governor Mark Carney has highlighted core inflation as an important measure for policy makers as they weigh when to begin interest rate increases after keeping them at a record low for more than six years.
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Draghi hints asset purchase extension

The euro weakened after European Central Bank President Mario Draghi said economic risks to the currency bloc are “clearly visible” and that policy makers’ asset purchase plan will be extended if needed to reach their inflation goal.
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Sterling higher in a quiet Monday trade

There are no major data releases today, with Sterling slightly higher after large decline on Friday due to NFP figures. Also, markets are being influenced by latest BoE interest rate decision and the following minutes. The Bank froze rates at 0.5% again yesterday with Ian McCafferty the only member of the nine-strong monetary policy committee voting for a hike. It said inflation, running at minus 0.1 per cent, would return to the 2 per cent target ‘in around two years’ if rates rose as expected by markets.
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