Speaking on Bloomberg Television from Davos, Switzerland, where the World Economic Forum meeting is being held, ECB President Jean-Claude Trichet made clear comments that signal a wait-and-see attitude regarding future rate cuts. Trichet made clear that the next important meeting will be in March at which point the impact of a lower deposit rate can be judged with better accuracy and a lot of new information will allow for a proper decision. The President declined to say how low rates will go but made note that very low rates are inconvenient and that the ECB will continue to take measures as needed. Trichet maintains optimism about growth in 2010, despite news this morning released by the IMF suggesting a larger than previously expected 2% drop for the Euro Zone in 2009. No significant action has been observed in the currency markets following Trichet's comments. Reaction is mixed as slow action by the ECB to potentially worsening conditions may prolong the recession and lead to continued Euro depreciation.
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