American focus: the euro exchange rate fell markedly

The euro exchange rate has fallen today, after the Governing Council of the ECB cut interest rates by 25 bps up to 0.5%. In a subsequent press conference, the head of the Central Bank Mario Draghi hinted that the ECB is ready to deystvovat "if the situation requires further reduce the cost of lending. According to Draghi, the spring has kept the euro zone economy weakness, and reduced rates was aimed at maintaining recovery, which should begin later this year. The labor market situation still leaves much to be desired, and the uncertainty continues to weigh on the recovery process. Commenting on the inflation, Draghi said that its recent decline reflects the drop in energy prices, but also a consequence of large-scale temporal effects associated with changes in annual rates of prices for services in the Easter season. He suggested that during the year the inflation will be subject to volatility. The head of the Central Bank made it clear that the monetary authorities will continue to adhere to the accommodative policy as long as necessary. He also said that the ECB will consult with the other European institutions on initiatives to promote the functioning of the market in respect of asset-backed securities, debts of non-financial corporations.

The yen fell against most major currencies, helped by the ECB's decision to lower interest rates. Also influenced by the dynamics of a report from Markit Economics and HSBC, according to which it was reported that the index, which measures the efficiency of production in China, fell in April, while reaffirming the fragile economic recovery. According to the report, the results of April purchasing managers' index, which measures the level of activity in the manufacturing sector fell to 50.4, down from 51.6 in March. Note that, despite the decline, the figure is above 50, indicating expansion of activity, albeit at a slower pace than in the previous month.

The pound fell against the dollar after the ECB rate cut by 0.25% to 0.5%. We also note that today's report showed that business activity index for the UK construction sector in April rose to 49.4 points. Today's data confirmed the trend of yesterday's index for the industrial sector of the country. Let's see what the data show for the services sector, which will be presented tomorrow. Among the British PMI index only the index for the services sector indicates expansion of the sector. Value of the index in March was at the level of 52.4 points in April, is expected to rise to 52.5 points against 49.4 STANDBY for the construction sector and 49.8 for the industry. As for the PMI index for the countries of continental Europe, their final values ​​went above and preliminary forecasts (with the exception of Germany - at the level of the forecast), although it continued to point to a slowdown in the sector (all figures came out below the level of 50 points).