Market Reaction to ECB President's Comments

Germany's DAX index experienced a 2% drop on Thursday, as European markets reacted to the cautionary remarks made by European Central Bank (ECB) President Christine Lagarde. Lagarde highlighted the potential slowdown in the region's growth if the US tariffs on European imports are met with a European counter-response.

Impact of US Tariffs on Eurozone Growth

According to Lagarde, the proposed 25% tariffs by the US on imports from Europe could reduce the Eurozone's growth by approximately 0.3 percentage points in the first year. She further warned that a European response, such as increasing tariffs on US imports, could exacerbate the situation, potentially doubling the impact to about half a percentage point.

Market Movements and Currency Fluctuations

At 6:21 am ET, the DAX was down by 2.00%, while the Euro Stoxx 50 saw a 1.33% drop. The FTSE 100 and CAC 40 also experienced declines of 0.39% and 1.28%, respectively. In the currency markets, the euro fell by 0.58% against the dollar, trading at $1.08403, and the pound decreased by 0.46% to $1.29431 at 6:38 am ET.