ECB’s Stark: Rates appropriate; free fall over, uncertainty remains

There are both upside and downside risks to the economy, says ECB economist Stark. There are reasons for optimism on the economic outlook, Stark says, while unwinding crisis measures in a timely manner will be key. That time has not yet come, he says.

His discomfort with very low interest rates is evident however, as he says low rates can hamper market functioning.

EUR/GBP buying is the flavor of the moment as the cross rises to 0.8889 so far. 0.8900 barriers are rumored, traders say. Lower UK deposit rates are today’s catalyst for extending the weak Sterling trend.