ECB expected to hold interest rates

With the euro off its recent highs, the pressure on the European Central Bank (ECB) to cut its key interest rates has eased a little and the bank is likely to hold rates steady when it meets later this morning, the eve of the G7 meeting in Florida, analysts say.

Analysts predict that the ECB will hold its rates steady today, the eve of the G7 meeting in Florida.

This is due to lessened pressure since the euro met recent highs, and the bank has already held its refinancing or 'refi' rate at a steady 2% since June 2003.

The strength of the euro has dampened exports in some European countries and the pressure is on for the ECB to ease monetary conditions in the eurozone.

ECB officials have argued that surging global demand would offset any negative currency effects.