European Central Bank President Jean-Claude Trichet has signalled that no euro zone interest rate cuts are on the cards in the immediate future.
Speaking after the ECB held its key rates unchanged at 2% for the ninth month in a row, Trichet said the current level of interest rates in the euro zone remained 'appropriate'.
Euro zone inflation slowed to 1.6% last month, its lowest level in four years and well below the level of 2% seen by the ECB as the maximum tolerable level of inflation.
On the euro, the ECB chief said the bank was still concerned about excessive swings in exchange rates. The dollar has risen by around 6% against the euro since mid-February.
ECB watchers had not really been expecting the bank to announce any changes in euro zone borrowing costs this week, despite heavy political pressure from European politicians for a rate cut to cool the euro.
