Trichet warns about a protracted economic slowdown
FXstreet.com (Barcelona) In his first speech after December s interest rate cut, Jean Claude Trichet has depicted a gloomy economical outlook for this year and 2009, with economic growth stagnated, to say the least, and inflation returning to levels below 2% in the medium term.

The President of the European Central Bank has affirmed that the downward risks for economy have materialized, and that economic growth might have slumped deeper in the fourth quarter of the year. For next year, Trichet has forecasted GDP growth to be between -1.0% and 0% in 2009 and between 0.5% and 1.5% in 2010.

Jean Claude Trichet has expressed his fear that the credit crisis has dampened real economy, and he forecasts global demand to remain weak for a more protracted time.

Inflation expectations, according to Trichet, have improved, and Trichet expects CPI to decline to rates in line with price stability in 2009. The recent decline on inflation, however, has been due to the economic slowdown, affirmed the president of the ECB.

Trichet has also warned that uncertainty remains at extremely high levels, while financial turmoil hasincreased, and once again, has affirmed the Bank s Commitment to monitor all developments in order to keep CPI firmly anchored.

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ECB cuts rates by 75 bp to 2.50%
FXstreet.com (Barcelona) The European Central Bank Monetary Policy Committee has decided to cut its key interest rate by 75 basis points to 2.50% after its December monetary policy meeting.

The European Central Bank, as usual did not give any further explanation, so all the eyes are set on the press conference Mr. Trichet will hold later at 12.30 GMT.

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