European Central Bank keeps rates, policy and guidance unchanged

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Traders have initiated a sharp sell-off in the Euro following the April European Central Bank (ECB) event, resuming a trend that has been in place over recent days.

There is caution as well as confidence on inflation, he also said.

The ECB's interest rate on its main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at zero, 0.25 and -0.40 percent respectively.

Draghi told his press conference that the ECB was "cautious, tempered by unchanged optimism", that the strength of the eurozone economy will allow the bank to reach its inflation target.

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While the ECB's 2.55 trillion euro ($3.10 trillion) bond purchase programme, has cut borrowing costs and kick-started growth, although with no inflationary effect, policymakers will need to end the indefinite growth of money.

The Frankfurt-based bank also said it planned to maintain its bond purchases under its quantitative easing policy at EUR30 billion a month until at least September this year.

The ECB president is not expected to offer any clues about when the bank will end its stimulus program, under which it purchases 30 billion euros ($37 billion) of bonds per month.

The euro rose 0.3 percent to $1.2197 as Draghi spoke. But with the risk of a global trade war still looming, it may not make a decision until absolutely necessary.

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A year ago was the strongest in a decade for economic growth in the euro zone, but a recent slump in investor sentiment since the start of 2018 could threaten the ECB's inflation outlook. No changes are expected in interest rates or monetary stimulus settings.

Business confidence in the 19-country bloc has already taken a knock, most notably in export-focused Germany.

This week's European Central Bank meeting comes as leaders of the eurozone's two biggest economies - France's Emmanuel Macron and Germany's Angela Merkel - visit Washington for talks with US President Donald Trump in a bid to end trade and geopolitical tensions.

One worry is that protectionist rhetoric from the United States could push down the value of the dollar, an economic anomaly as the Federal Reserve is likely to raise interest rates several times this year, a natural support for its currency.

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Euro zone inflation is so weak that even after the creation of 9 million jobs since early 2013, measures of underlying price growth that strip out energy and food are barely rising.

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