Mar. 7 - The euro rose after the European Central Bank left its benchmark interest rate unchanged. The bank's chief Mario Draghi says a gradual recovery is expected this year. Ciara Sutton reports.
No rate cut, no major surprise... But the ECB's growth outlook suggests the region's not out of the woods yet. It's warning GDP could fall by 1 percent this year unless governments stick to structural reforms But President Mario Draghi says markets have settled quickly after Italy's fractured election. And threat of contagion has been muted. (SOUNDBITE)(English) ECB PRESIDENT MARIO DRAGHI, SAYING: "A gradual recovery should commence in the second part with export growth benefitting from a strengthening of global demand and domestic demand being supported by our accommodative monetary policy stance." The ECB has calmed the euro zone crisis in recent months - and it has no plans to renege on its pledge to buy government bonds from struggling members. (SOUNDBITE)(English) ECB PRESIDENT MARIO DRAGHI, SAYING: "OMT remains, is in place. It is a very effective backstop, and it is there. But you know the rules and as I said, the ball is in the government's hands." Although the decision to keep rates at record lows of 0.75% met analysts' expectations, many predict it will be cut further at some point soon. (SOUNDBITE) (English) CIB, ADAM MYERS, SAYING: "The ECB is definitely willing to be patient not withstanding the fact that the economic data continues to deteriorate. It looks like they're at least going to wait for another month but perhaps two, as we move into the end of the Spring before they deliver the market any more policy accommodation, and that is being taken by a bit of a surprise by investors." But Berenberg Bank's Christian Schultz is optimistic recovery is here to stay. (SOUNDBITE) (English) BERENBERG BANK'S ,CHRISTIAN SCHULTZ, SAYING: "If at the same time you expect the economy to recover at the end of the year and if all the signs that the ECB has pointed to are healing financial markets and more confidence, then you can't cut rates - that's the outcome of the discussion and that's probably the outcome of the discussion at the next couple of meetings too." The euro climbed to a session high against the dollar after the announcement. The Bank of England also voted to leave its quantitative easing programme unchanged. It says the scheme designed to boost lending is showing signs of success.