FRANKFURT, May 8 - The European Central Bank left interest rates unchanged on Thursday as expected, defying rising speculation a rising euro and grim economic data would entice it into a surprise cut. The bank left its benchmark minimum bid rate at the weekly refinancing auctions unchanged at 2.50 percent, a life-low matching its November 1999 level. ECB President Wim Duisenberg will explain the decision in a news conference due at 1230 GMT. The bank at the news conference also will announce the results of its five-month long review on how well its monetary policy strategy for guiding interest rate decisions has worked.
Money markets were disappointed with the decision not to lower rates after bracing for a rate cut following dismal German data on Wednesday and with the euro hitting fresh four-year highs this week, which helps quelling inflation. Most analysts were expecting the ECB to stay put until June however, giving it more time to see where euro zone growth is heading and for more evidence inflationary pressures are easing. Separately, the Bank of England also left rates unchanged on Thursday. The Federal Reserve left interest rates steady at 1961 lows on Tuesday, but opened the door to future reductions by warning of the deflationary risks to the U.S. economy.//