ECB’s Draghi Paves the Way For End of Asset Purchase Program

Investing.com – While the in a widely-expected move on Thursday, its chief, , strived to leave monetary policy coasting along on its current path, while insisting that their outlook for inflation of 1.7% was consistent with its mandate.

The announcement confirmed that the ECB plans to put an end to the asset purchase program at the beginning of the next year, but Draghi stressed that policymakers had not “even discussed when to discuss” plans for reinvestment of those assets.

Although the ECB cut its euro area growth outlook for this year and next – to 2.0% from 2.1% and to 1.8% from 1.9%, respectively – Draghi insisted that “risks surrounding the euro area growth outlook can still be assessed as broadly balanced”.

“The major source of uncertainty we see in global outlook comes from rising protectionism,” Draghi said, but noted that the ECB was “observing upside strength in the broader economy” and highlighted with regard to the emerging markets that the spillovers from Turkey and Argentina “have not been substantial”.

When questioned whether the current forecast for 1.7% was consistent with the ECB’s mandate, Draghi stressed that it was, reminding reporters that the ECB’s objective is “close to, but below 2%, implying that the central bank is well-positioned to continue its move forward with the removal of accommodative policy.

The euro made a noticeable spike following the inflation response but has since pared gains. At 11:30 AM ET (13:30 GMT), the was last up 0.55% at $1.1690, compared to $1.1631 ahead of the ECB policy decision announcement. inched up 0.06% to 0.8915, just ahead of 0.8914 seen prior to the policy release.

The noticeable difference between the dollar and pound pairs was due to .

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