Hopes of rate cut rise but euro concerns remain

European Central Bank president Mario Draghi signalled that officials are ready to ease monetary policy next month and stepped up his expressions of concern about the euro’s exchange rate.

“The Governing Council is comfortable with acting next time, but before we want to see the staff projections that will come out in the early June,” Mr Draghi said at a press conference in Brussels. “There wasn’t a decision today. It’s a preview of the discussion we will have next month.”

ECB officials are debating how much stimulus they might need to add to a euro region economy haunted by the threat of deflation. While Mr Draghi gave no signal that radical moves such as quantitative easing are imminent, new economic forecasts next month may give them the scope to cut interest rates or inject more money into the region’s financial system.