Investing.com - The euro fell to the day’s lows against the other major currencies on Thursday after the European Central Bank said it would need to reassess its monetary policy stance in March, as inflation in the euro area remains weak.
EUR/USD hit lows of 1.0780, the weakest since January 7 down from around 1.0920 earlier.
The drop in the euro came after ECB president Mario Draghi said it would be necessary to “review and reconsider” the bank’s monetary policy stance at its next meeting in March, when new economic projections become available.
“As we start the New Year, downside risks have increased again amid heightened uncertainty about emerging market prospects, commodity markets, geopolitical risks,” Draghi said.
He said lower oil prices should help consumers and businesses, but the risks to euro zone growth remained to the downside.
Inflation expectations will be low in coming months, and will only pick up later in 2016, he said.
The ECB left the deposit rate at -0.3% after December’s cut and held the benchmark refinancing rate steady at 0.05%.
The bank expects interest rates to remain at present or lower levels for an extended period of time, Draghi said.
He noted that asset purchases under the banks quantitative easing program were proceeding smoothly and added that it clear that its monetary policies were working.
The ECB governing council has the determination to act and there are no limits within our mandate, he added.
The single currency fell to nine-month lows against the yen, with EUR/JPY down 0.73% to 126.40, the weakest level since mid-April 2015.