“We sent a strong message of confidence,”European Central Bank (ECB) Governing Council member Francois Villeroy de Galhau said on Friday.
“Our priority is to fight inflation.”
“French and European banks are ‘very solid’.”
“European banks are not in the same situation as the US banks.”
The Euro remains on the front foot, as EUR/USD is extending its recovery to near 1.0665, at the time of writing.
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The European Central Bank (ECB) Executive Board Member Francois Villeroy de Galhau recently declared that the ECB had “sent a strong message of confidence” with its recently concluded monetary policy meeting.
At the meeting, the ECB leader embraced additional stimulus and forward guidance rather than an increase in the interest rate. This move highlighted the commitment of the bank to counter the downward pressure on the euro zone economy that is being caused by factors such as Brexit and the US-China trade dispute.
In the statement released by the ECB after the meeting, Villeroy told reporters that “The Governing Council is determined, in the present circumstances, to act in a determined and timely manner using all the instruments available,” in order to ensure price stability within the euro area.
The statement went on to detail that, in addition to reaffirming their commitment to use all tools necessary to meet their price stability target, the ECB will restart net purchases of public and private sector securities in the coming week, amounting to a total of €20 billion a month.
The ECB also pushed back its outlook on the euro area, citing that it now believes that the economic slack rate is likely to fall short of the previously forecast level due to the uncertain external environment.
In responding to the question of how the ECB’s decision would affect the euro, Villeroy responded that the bank is “confident in the euro area’s resilience and our ability to respond accordingly.”
The confidence of the ECB in the euro area’s future despite external pushes has been well-received as investors are finding comfort in the matters.
Overall, the ECB has sent a strong message of confidence to Europe’s businesses and investors with their policies and commitments. Investors are now looking forward to seeing how the ECB’s moves will help to protect the euro zone’s economy in the coming months.