Euro gives up gains on ECB's subdued inflation view

FTSE 100 preview Muted start on the cards ahead of ECB rate decision

In previous meetings, Draghi also said the bank would revisit its policy communication early this year. It continued to state that net asset purchases, at €30bn a month, would run until the end of September 2018, or until the council sees "a sustained adjustment in the path of inflation consistent with its inflation aim".

While markets had hoped that the drop of its pledge to increase bond purchases was a sign of a more bullish ECB, Draghi's comments quickly undermined this sentiment.

For its part, the Bank of Japan, which abandoned setting short-term interest rates altogether, is also keeping steady asset purchases that have been in place in various forms for most of almost 20 years and have greatly intensified recently. This might give way for interest rates to be hiked by the mid-2019.

"As we pointed out before, sooner or later, the strong euro had to have some impact". And at this stage in the economic cycle, growth can become fragile very quickly.

"This outlook for growth confirms our confidence that inflation will converge towards our inflation aim.over the medium term", Draghi said.

During the subsequent European Central Bank press conference, Draghi was able to tone down any hawkishness in the statement in his responses to questions from the assembled group of journalists.

"Talk of greater available slack and the clear easing of inflation pressures has taken the pressure off the committee to act, and with a typically dovish Mario Draghi allowed to maintain an accommodative stance going forward, today is clearly a case of taking with one hand and giving with the other", he wrote. But he said such disputes should be worked out among trade partners, not decided by measures initiated from one side.

Fears of a transatlantic trade war and political deadlock in Italy did not deter policymakers from the strong hint that the end of their support for the 19-nation single currency area is drawing closer.

More news: Jaylen Browns Walks Off Court On Own Power After Scary Fall

But it was on the path of policy tightening that Draghi dialled back the most on.

Its inflation projections were also unchanged for 2018 at 1.4 percent, but slightly lowered for 2019 from 1.5 to 1.4 percent.

However these gains were quickly unwound as Draghi spoke to reporters in a press conference shortly afterwards as he suggested that ECB's policy would remain "reactive" as he signalled that the bank's inflation outlook remained subdued.

On the currency markets the dovish message won out.

The euro jumped higher on the news, rising from US$1.2379 before the bank issued its policy statement to as high as US$1.2425. Against the pound, the euro was 0.13% lower at £0.8916 and fell 0.65% to Y130.81 versus Japan's yen.

"We see the euro only slightly stronger than current levels by the end of this year, before moving back into the low 1.30's against the [greenback] in 2019 as the European Central Bank finally joins other developed economies in raising interest rates". The EURO STOXX 50 closed 1.1% up at 3,415.74 points.

Ready to get started?

Related News:

  • Ireland pile pressure on England with bonus-point win

    Ireland pile pressure on England with bonus-point win

    Ireland v Scotland (kick-off 2.15pm) is now the potential tournament decider. "It's just a tough period for us at the moment. He is a strong character, he likes a laugh and a joke but he is serious about his rugby.
    Charlize Theron Gets Her Weed From A Surprising Source

    Charlize Theron Gets Her Weed From A Surprising Source

    To Theron's surprise, her fellow experiment subject made the first move and went to the dispensary to obtain research materials. The 41-year-old actor also said she is one of the bravest people he knows.
    International Women's Day 2018 theme is #PressforProgress

    International Women's Day 2018 theme is #PressforProgress

    Liverpool: Women Are My Sisters, Not My Competition on 8th March, where women from all walks of life come together to network. Ms Kennedy said: "There are many challenges facing us as women as we continue the struggle for equality".
  • Meghan Markle's heartwarming words to budding 10-year-old actress

    Meghan Markle's heartwarming words to budding 10-year-old actress

    Kate Middleton was also confirmed into the Church of England ahead of her wedding to Prince William in 2011. is chronicling the fashion style of Harry, the Duke of Cambridge and other royal men.
    Striking Spanish women hold hundreds of rallies against gender inequality

    Striking Spanish women hold hundreds of rallies against gender inequality

    Forty-nine women were killed by their partners or ex-partners in the country previous year , an increase from 44 in 2016. While Spain is seeing some of the largest walkouts, women in many other countries around the world were also on strike.
    Nintendo Direct March 2018 - Mario & Luigi Bowser's Inside Story + Bowser's Jr's Journey

    Nintendo Direct March 2018 - Mario & Luigi Bowser's Inside Story + Bowser's Jr's Journey

    Luigi's Mansion on 3DS looks almost identically to the original, but instead will be playable on the go with the 3DS. The next title, Mario and Luigi: Bowser's Inside Story + Bowser Jr's Journey is set to release sometime next year.
  • BLS: Employment up 313000; unemployment rate unchanged

    BLS: Employment up 313000; unemployment rate unchanged

    Still, the unemployment rate for African-Americans remains stubbornly higher than the rates for other racial and ethnic groups. The proportion of people in their prime working years ( 25 to 54 ) who are working is at its highest level since 2008.
    Winter Paralympics: All you need to know

    Winter Paralympics: All you need to know

    Just like the Winter Olympics 2018, the 2018 Paralympics opening ceremony will be held at the PyeongChang Olympic Stadium. The KPC said the two Koreas had made a decision to respect each other's stance and march separately.
    Serena Williams announces details about her big comeback

    Serena Williams announces details about her big comeback

    As much as I'd like to tell you like "it doesn't matter how I play here", I didn't come here to lose first round 2 and 2. In November 2008, she commissioned her first school under the same name in Matooni, about 50km from the newer school.
  • 3 killed, dozen injured in blast, fire in chemical factory in India

    3 killed, dozen injured in blast, fire in chemical factory in India

    Palghar district collector Prashant Narnaware, meanwhile, said the owners of the unit will likely be booked for negligence. Hundreds presumed the explosions, "sounding like a huge bomb", was an natural disaster , and rushed out on to the streets.
    NY volunteer firefighters: Time to check smoke alarms

    NY volunteer firefighters: Time to check smoke alarms

    Barritt emphasizes that if a person has any questions about their smoke and carbon monoxide alarms to contact the fire department. Smoke alarms with non-replaceable (long-life) batteries are available and are created to remain effective for up to 10 years.
    Android P Developer Preview Download Available Now

    Android P Developer Preview Download Available Now

    The Pixel C launched around the same time and should have the same update policies, but it isn't listed on Google's update page . In order to use the Google Lens in an Android smartphone, all you need to do is to choose a picture from the Google Photos app .

Most liked

Real Madrid Concerned After Raphael Varane Sustains Head Injury During Eibar Win
But Ronaldo proved the difference again, the 33-year-old taking his tally for the season to 35 goals in 37 appearances. With 50 minutes on the clock, Ramis headed home unchallenged from the resultant corner from Pedro Leon.

Moyes: Referee did not consider abandonment despite pitch invasions
West Ham United have now lost three league games in a row by a margin of three or more goals for the first time since March 2008. Afterwards West Ham manager David Moyes called for the fans to get behind the team.

Rodgers: Celtic will do their talking on the pitch
We played a practice game this week and he looked very, very strong in it. He added: "We don't want to change anything before a big game".

Can Arsenal and Chelsea really condemn Tottenham to the Europa League?
The storm certainly appears to be gathering, but lest we forget Wenger has ridden out this kind of turbulence many times before. They have beaten Roma, Lazio and Inter under Gattuso, so they'll have no fears about facing Arsenal.

Saudi skies are now open to flights to Israel
Flying through Saudi airspace will cut the Delhi-Tel Aviv journey time by about two hours, an Air India spokesman said. The Saudi government had banned flights headed to Israel from using its airspace for 70 years.

Saudi Crown Prince: Turkey part of 'triangle of evil'
Demonstrators are protesting against Britain for licensing 4.6 billion pounds of weapons sales to Saudi Arabia since 2015. The war is being led by bin Salman, also Saudi Arabia's defense minister, with the help of the United States and the UK.

Draymond Green thinks Anthony Davis could edge out James Harden for MVP
After hurting his ankle against the Kings, Davis' x-rays came back negative, but he is still listed as questionable for this game. The second quarter did not get any better for the Kings as the Pelicans continued to stomp on the accelerator.

NSE Calls For Gender Equality, Women's Empowerment
Young women take part in the Women's March against Violence as part of International Women's Day, on March 8 in Milan, Italy. The celebrations were held under the theme: " Time is now: rural and urban activists transforming women's lives ".

Malfunction Leads to Loss of Frozen Eggs, Embryos
The cost of the procedure range from at least $12,000 to $14,000. It has also moved the eggs and embryos to a working tank. She added: 'Right now, our patients come first.

'Fortnite' Coming to Mobile Very Soon, Sign Ups Begin Monday
Once the mobile versions reach their final build, both iOS and Android will offer cross-play with PC, PlayStation 4 and even Mac . What has made Fortnite Battle Royale so popular? In the meantime, you can sign-up for an Invite Event on iOS from Monday 12.

India Supreme Court restores 'love jihad' marriage
However, the agency could not investigate the Hadiya's marital status, the court said , reiterating a stand it had taken earlier. The NIA, too, had said previously that Hadiya and Jahan's marriage could be classified as a case of "love jihad".

Frances McDormand 'in tears' after Best Actress Oscar is stolen
This is mine", he said , before planting a kiss on the Oscar's head in a since deleted video selfie posted to his Facebook . He followed Bryant out of the party "and without any resistance from Bryant took the Oscar from him", the statement said.

Riyad Mahrez explains his regrets over failed move to Man City
Mahrez also brushed off the hoax retirement announcement posted on his Facebook page this week. Mahrez was absent from training during the final stages of the transfer window.

Syrian Army Preparing to Lift Siege on Militant-held Eastern Ghouta
Civilians gather near a convoy of Syrian Red Crescent vehicles Monday in Douma in eastern Ghouta , a suburb of Damascus , Syria . They also forced an aid convoy , the first to reach the enclave in over three months , to leave before it had fully unloaded.

Five takeaways from President Trump's news conference with Sweden's prime minister
He said Sweden, which has an embassy in Pyongyang, is willing to help the United States and other "key actors" in negotiations. Trump has been upset at previously negotiated trade deals he said have hurt the US economy and cost manufacturing jobs.