ECB’s Panetta: Reduced room to cut rates further, but macro outlook remains weak

European Central Bank (ECB) executive board member Fabio Panetta said on Friday that there is a “reduced room to cut rates further, but the macro outlook remains weak and trade tensions could worsen it.”

Further comments

Future rate decisions need to be assessed on case-by-case basis, weighing data, inflation and growth outlook.

Essential to maintain pragmatic and flexible approach, closely monitor liquidity conditions.

Disinflation has not taken too high a toll on the Eurozone economy and is now close to completion.

Outcome of trade negotiations uncertain but impact on European economy bound to be significant.

Sectors most exposed to tariffs already showing signs of falling confidence, weaker expectations on orders and employment.

Market reaction

EUR/USD was last seen changing hands at 1.1345, down 0.21% on the day, little moved by these comments.