Interest rate Decisions

Both ECB and BoE left interest rates unchanged as widely expected.Euro dips mildly, in particular against Sterling, as market interprets Trichet's remarks in the following press conference as less hawkish than expected. No "vigilance" is used as widely expected. To some's surprise, Trichet dropped the description of "on the accommodative side" to interest rates. Also, Trichet emphasized the need to "gather additional information and examine new data before drawing further conclusions for monetary policy". Trichet highlighted that "particular" caution is needed to be given to the financial market development which heightened risks to growth of the Eurozone economy. Though Trichet does noted recent climb in HICP inflation and that medium term risks to inflation remain on the upside and ECB stand ready to counter these risks.