Thursday, April 21, 2016

Forex - Euro off highs as Draghi leaves way clear for further cuts

© Reuters. Euro trims back gains as Draghi says ECB prepared to cut rates again if necessary© Reuters. Euro trims back gains as Draghi says ECB prepared to cut rates again if necessary

Investing.com - The euro pulled away from the day's highs against the dollar on Thursday after European Central Bank President Mario Draghi to ensure inflation returns to target.

was last at 1.1298, after rising as high as 1.1399 earlier.

The euro held gains against the yen, with up 0.2% at 124.30.

The ECB stands ready to use "all instruments available," including further interest rate cuts to ensure the inflation rate returns to its target, Draghi said Thursday.

Draghi said that the risks to the euro zone economy remain "tilted to the downside" and warned that inflation could turn negative again in the coming months.

But he said the ECB is still confident that inflation will rise back toward its target of just below 2%.

Draghi also said the governing council had discussed the German criticism of its ultra-loose monetary policy and was "unanimous" in asserting the appropriateness of current policy.

He added that the ECB was obliged to take steps to spur price growth under its mandate.

The ECB eased monetary policy aggressively last month, unveiling a raft of measures including interest rate cuts, additional monthly bond purchases and more cheap loans to banks.

The governing council of the ECB held the for the euro zone at a record low zero earlier Thursday, in a widely anticipated decision.

The , charged on commercial bank deposits at the ECB, remained at -0.4% and the marginal lending facility, which banks pay to borrow from the ECB, was unchanged at 0.25%.

The ECB also left its bond-buying program unchanged at €80 billion per month.

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