European Stocks Rally, Euro Slumps After ECB Cuts Rates

LONDON (The Deal) -- European markets rallied Thursday after the European Central Bank unexpectedly cut its key interest rates. 

London's FTSE 100 added 0.27% to 6,892.26, while the CAC 40 in Paris added 1.13% to 4,472.05. In Frankfurt, the DAX climbed 0.41% to 9,666.31, while the euro slid against the U.S. dollar. 

The ECB's Governing Council reduced all three of its main interest rates by 10 basis points. As of Friday, the benchmark rate will be 0.05%, the deposit rate at negative 0.2% and the interest rate on the marginal lending facility at 0.30%. 

Speaking to journalists after the meeting, ECB President Mario Draghi said policy makers had taken into account the subdued inflation outlook and weakening growth momentum in the eurozone. He also said that policy makers were unanimously willing to consider "additional unconventional instruments" if needed. 

The surprise rate cut came after the Bank of England, as expected, left rates in that country unchanged at historic lows as expected.

 

 

 

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