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ECB Trichet Gives Hawkish Comments on Interest Rate
Tuesday, 16 December 2008 10:26:09 GMT  |  DailyFX Research
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ECB's Trichet hints at steady rates in January. The ECB president said after the 175 bp cut in December the ECB now has to concentrate "on getting what we already decided to be really operational", which ties in with other comments suggesting that the ECB is now in a wait and see mode and will await new data before deciding on rates again. Trichet also said that the ECB seems a limit to the decrease in rates and that the central bank has to "beware of being trapped at nominal rates that would be much too lower", which indicates that the central bank will be cautious with further cuts as the refi rates approaches historically low levels. At the same time the president confirmed that the central bank is examining to lower the deposit rate. Nothing entirely new in the comments, but a confirmation that rates are likely to be on hold in January.

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