OECD chief economist Jean-Philippe Cotis has cut his forecast for eurozone to 0.9pc this year compared with the OECD's previous forecast of a growth rate of 1.8pc. In an interview with the International Herald Tribune, Cotis said the European Central Bank (ECB) should therefore cut interest rates by a "significant" amount. "There is a clear-cut case" for the ECB to cut rates soon by more than 25 basis points, he said, adding, that the ECB has ample room for manoeuvre to spur economic activity. Meanwhile the US is still on course to grow by around 2.5pc this year, and the threat of a global recession has faded as oil prices have stabilised after US-led forces have secured Iraqi oil facilities, he said. "The notion that oil facilities are more secure has caused markets to lower the price of oil... and that makes the threat of a recession more distant than it was even two months ago," he added.
Cotis said the dollar's depreciation against the euro is good for the world economy because it helps correct the US current account deficit, and there is no reason for euro zone exporters to complain. //www.fxcentre.com