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ECB Holds, Signals End of QE in December

ECB Holds, Signals End of QE in December

ECB Holds, Signals End of QE in December
Economic Indicators
Thursday, June 14, 2018 - 11:45

Investing.com - The European Central Bank left interest rates on hold on Thursday, in what was a widely anticipated decision and said it expects to wind up its bond-purchasing stimulus program in December.

The ECB said it anticipates that its asset purchase program will end in December after halving to €15 billion per month from September 2018, from €30 billion at present.

The ECB also pledged to keep interest rates unchanged until at least the middle of next year.

"The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019 and in any case for as long as necessary to ensure that the evolution of inflation remains aligned with the current expectations of a sustained adjustment path," the ECB said.

The euro fell to the days lows following the announcment, with EUR/USD down 0.57% to 1.1725, off an earlier high of 1.1852.

The euro was also lower against the yen and the pound, with EUR/JPY losing 0.76% to trade at 129.12 and EUR/GBP down 0.58% to 0.8765.

Recent hawkish comments by ECB officials had boosted expectations for a shift in its forward guidance. ECB Chief Economist Peter Praet said last week that officials would debate whether to wind down the bank’s massive bond purchasing program later this year at today’s meeting.

Most analysts had only expected a decision on the timing for ending the asset purchase program to come at the ECB’s July meeting

Investors were awaiting the bank’s post policy meeting press conference for its view of the euro area economy and the strength of the euro.

© Reuters.

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