Investing.com – After the European Central Bank (ECB) produced a monetary policy announcement that was an exact reproduction of its previous statement in September with the exception of the date, president Mario Draghi explained that the ECB would wait for updated economic forecasts in December to make a decision and said that the euro area central bank had not discussed either tapering the size of its current €80 billion monthly asset purchase program (APP) or extending the horizon of the purchases, known as quantitative easing (QE).
The ECB once again left interest rates unchanged in their policy decision on Thursday and Draghi used his speech at the follow up press conference to repeat that they “confirm that the monthly asset purchases of €80 billion are intended to run until the end of March 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.”
Draghi pushed any possible move by the ECB to the December meeting, explaining that they would have updated economic forecasts at that time and thus have the information necessary to make a full decision at the time.
“Right now we have options,” he explained.
“And we didn’t go into counting views, or majorities, today,” Draghi added.
Furthermore, the ECB chief did reveal that no discussion had taken place at the meeting on the tapering of the current asset purchase program, but added that policy makers had also not discussed extending the horizon of the current program which is scheduled to end on March 2017.
The euro-dollar whiplashed on the two opposite positions but further downside came when Draghi finally suggested that tapering would likely take place despite the fact that “it wasn’t discussed” in the Governing Council.
“An abrupt end to bond purchases?” he asked rhetorically, to which he responded, “I think it’s unlikely.”
The euro sunk on the remarks, falling to a four-month low against the dollar at 1.0935. The previous low in the EUR/USD of 1.0909 was reached on June 24 in the aftermath of what was then the U.K.’s surprise decision to exit the European Union.