European Central Bank keeps interest rates on hold amid caution on data

European Central Bank monetary policy meeting and President Draghi

European Central Bank keeps interest rates on hold amid caution on data

"The Governing Council now expects the key European Central Bank interest rates to remain at their present levels at least through the end of 2019, and in any case for as long as necessary", the European Central Bank said in a statement, reaffirming its interest rate guidance.

Draghi was speaking hours after U.S. President Donald Trump threatened to pile tariffs on another $11 billion worth of goods from the European Union, ratcheting up tensions as the two sides negotiate trade terms.

MSCI's broadest index of Asia-Pacific shares outside Japan paused after four straight days of gains but held near its highest since last August.

USA and Asian stocks fell, and the MSCI world equity index, which tracks shares in 47 countries, dropped below the six-month low reached earlier in the week. The S&P 500 gained 10.01 points, or 0.35%, to 2,888.21 and the Nasdaq Composite added 54.97 points, or 0.69%, to 7,964.24.

Central banks, including the ECB, have turned dovish this year on worries about slowing growth.

The European Central Bank (ECB) on Wednesday confirmed its key interest rates would remain unchanged and at a record low amid growing uncertainty about the eurozone's economic outlook. Economic weakness has been "somewhat longer lasting" than anticipated, ECB President Mario Draghi said.

In response, European bank stocks declined and the yield on Germany's benchmark 10-year bond fell to a one-week low of negative 0.039 percent.

Minutes from a March 19-20 meeting of Federal Reserve policymakers showed they agreed to be patient about any changes to its interest rate policy as they saw the USA economy weathering a global slowdown without a recession in the next few years.

U.S. Treasury yields slipped, weighed down by the tepid U.S. inflation data for March, which reinforced expectations that the Fed would hold rates steady or possibly cut them by the end of the year. The U.S. and China are in a trade war that has affected Europe and the U.S. government has this week said it is considering tariffs on another $11 billion of European Union goods.

Investors will next focus on inflation data from China at 0130 GMT.

And he added that despite the weak activity, "the probabilities of a recession remain low".

The dollar index fell 0.07%, with the euro up 0.09% to $1.1271.

Sterling traded at $1.3095, unchanged on the day and staying in a triangle holding pattern between $1.2945 and $1.3380 during the past month or so. Brent crude futures were at $70.81 per barrel and in reach of Tuesday's five-month peak of $71.34.

USA crude futures stood at $64.32 per barrel, up 0.3 percent after rallying to a five-month high of $64.79 on Tuesday.

Gold rose on Wednesday, lifted to its highest in nearly two weeks as investors fretted about the global economy and trade tensions.

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