The European Central Bank (ECB) on Thursday left its benchmark lending rate unchanged at a record low 1%, as expected. The official borrowing costs in the eurozone have been left at a record lows for the 16th consecutive month.
Markets and experts are now awaiting ECB President Jean-Claude Trichet's monthly news conference later today.
He is widely expected to confirm that the central bank plans to continue offering a range of special liquidity-boosting measures to European banks through the end of the year to help them overcome the ongoing fiscal crisis.
The move reflects continuing uncertainty about the strength of the economic recovery (both locally as well as globally), and the vulnerability of banks in eurozone peripheral euro-zone countries such as Greece, Portugal, Spain and Ireland.
Although euro-zone's economic growth has picked up pace in recent months, inflation, which was at 1.6% in August, remains in line with its target of an annual rate below but close to 2%.
Trichet last month said that the euro-zone economy would show strong second-quarter growth but warned that activity would be more moderate in the second half of the year. Subsequent second-quarter data showed euro-zone GDP expanded 1% compared to the second quarter.
The ECB is expected to boost their forecast for 2010 growth.
Euro-zone growth was driven in large part by a 2.2% quarterly jump in German GDP, fueled by strong industrial production and exports.
Also, purchasing managers index (PMI) readings for the euro-zone manufacturing sector showed the pace of growth has slowed so far in the third quarter but remains on track for a strong performance.
Earlier today, Sweden's central bank hiked its key repo rate by 0.25% to 0.75%. The increase was in line with market expectations.
Read more:
Euro-zone Q2 GDP growth kept at 1%