Euro stays in tight range while Sterling retreats mildly term ECB and BoE left rates unchanged. ECB kept rates unchanged at 4.00% today. In the following press conference, Trichet said that even though policy stance is still on the "accommodative side" and inflation risks remains on the upside in the medium term, more information is needed before the next policy move. Also Trichet said that it's too early to draw conclusion from the current correction in risk reassessment. No "vigilance" was used by Trichet this time which suggests that ECB will be on hold for a while, at least, till Oct. One thing to note is that Trichet emphasized a few times that ECB has to ensure that money markets function properly whatever the interest rate is and that this is completely separate topic to maintaining price stability. Also, ECB announced a new long-term refinancing operation as a supplementary operation will be conducted, the details of which will be available right after the press conference.........Read more......
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