ECB Raises Growth Concerns, Euro-Dollar Falls Below

[DailyFx]

ECB's Papademos warns that euro zone slow down is likely to be longer, due to the banking crisis, though he still expects the economy to recover gradually in 2009, according to a newspaper item reported by Reuters. Papademos also states that the financial turmoil has made euro zone banks more vulnerable to potential shocks and credit risks, but that the ECB will do what is necessary to maintain price stability over the medium term. He says the economic outlook is surrounded by an exceptionally high degree of uncertainty. He also adds that market rate cut expectations will be influenced by favorable oil price developments, and the impact of slower growth on inflation. Meanwhile, the euro-dollar have weaken over the past 24 hours to hold near 1.4630.