6/18, 10:05 AM (Source: TeleTrader)
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Draghi: ECB to fight as inflation is too low

The risk outlook for the Eurozone is still tilted to the downside and "lingering softness" is seen in data related to "the coming quarters," European Central Bank President Mario Draghi stressed on Tuesday. Speaking at the institution's event in Sintra, Portugal, he vowed to cut interest rates further if it is needed and underscored rate setters have mitigating measures in their toolbox. He also hinted at asset purchases and claimed the central bank "remains committed to its objective and does not resign itself to too low inflation."

Rate-setters can still enhance the so-called forward guidance in an effort to achieve price stability. Inflation expectations on a five-year horizon have reached record lows at under 1.4% compared to the goal which is set at just below 2%.

"The risks that have been prominent throughout the past year, in particular geopolitical factors, the rising threat of protectionism and vulnerabilities in emerging markets have not dissipated. The prolongation of risks has weighed on exports and in particular on manufacturing," Draghi stated.

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