ECB holds rates steady as economy shows resilience

BRUSSELS: The European Central Bank left interest rates unchanged for a third meeting, with inflation in check and the economy continuing to grow.
The deposit rate was kept at 2% on Thursday - as predicted by all analysts in a Bloomberg survey. Policymakers continued to offer no guidance on future steps, stressing that they'll act one meeting at a time based on incoming data.

"The robust labour market, solid private sector balance sheets and the Governing Council's past interest-rate cuts remain important sources of resilience," the ECB said in a statement. "However, the outlook is still uncertain, owing particularly to ongoing global trade disputes and geopolitical tensions."

The decision did little to move markets. The euro held onto earlier losses, trading down 0.4% at $1.1554, while two-year German yields remained three basis points higher at about 2%. Swap markets continue to suggest the ECB's campaign of cuts is likely over.

Officials have been vocal of late in signalling that there's little reason to add to the eight reductions in borrowing costs they've made to date. Their confidence stems from inflation that's been hovering around the 2% goal for months and indications that the economic damage from Donald Trump's trade measures has been relatively contained.

That stance contrasts with that of the Federal Reserve, which lowered US rates for a second meeting on Wednesday, citing slowing jobs gains.
President Christine Lagarde will elaborate on the ECB's decision at a 2:45 p.m. press conference in Florence, Italy.
The announcement comes on a busy day of economic news, with data earlier showing gross domestic product in the 20-nation euro zone rose more than expected in the third quarter.