New York, Jan 25: The euro tumbled against the dollar Thursday following a dovish European Central Bank announcement, while US stocks were mixed as a government shutdown churned on with no resolution in sight.
The ECB as expected kept interest rates unchanged. ECB Chief Mario Draghi warned that risks to the economy were “moving to the downside,” a gloomier outlook than in recent meetings, signaling that the central bank could still take measures to prod growth.
“The fact that Mr. Draghi expressed greater concern over the bloc's economic health suggested a later rather than sooner rate hike,” said Joe Manimbo, senior market analyst at Western Union Business Solutions, predicting further pressure on the euro.
Earlier, a survey by data firm IHS Markit estimated Eurozone business growth in January at its lowest level in five and a half years.
“The Eurozone economy slipped closer to stall speed in January, with companies reporting the first drop in demand for over four years,” IHS Markit economist Chris Williamson said.
Williamson cited the “yellow vest” protests in France as a drag on the euro area, but noted: “German businesses are also reporting their toughest spell for four years.”
