Draghi Faced Nowotny Plea to Discuss ECB Policy

The European Central Bank building in Frankfurt

The European Central Bank building in Frankfurt

As the central bank approaches technical limits to its bond-buying, it has little choice but to hope such forecasts come true as it tiptoes on a path out of QE defined by Draghi's favourite adjectives: "confidence, patience, persistence and prudence".

The bank also confirmed that the net asset purchases, at the current monthly pace of euro 30 billion, will run until the end of September 2018, 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.

The bank's 25-member governing council said Thursday that it was holding its benchmark refinancing rate at a historic low of zero, with analysts not expecting the bank to deliver a fresh rate hike until around the middle of 2019.

But, investors will be waiting to see whether President Mario Draghi gives any clues away as to the future of the institution's asset purchasing program, with speculation mounting that the European Central Bank will prolong the massive scheme created to stimulate the region's economy by buying bonds.

While his position was shared by a few others, most policy makers deferred to the president to determine when to examine the topic, they said.

The bank's quantitative easing (QE) programme, in which it now buys €30bn (£26bn) a month of eurozone bonds, is set to end in September this year.

With Thursday's decision, the ECB's bond purchases, aimed at stimulating growth and inflation through rock-bottom debt costs, will continue at 30 billion euros a month at least until the end of September, or beyond if needed to prop up inflation.

May faces parliamentary revolt over post-Brexit customs union membership
He is one of many vocal Tory MPs, including Michael Gove, opposing any softening of a withdrawal from the customs union. May has repeatedly promised to end all existing UK-EU customs arrangements as part of Britain's departure from the EU.

The euro rose 0.3 percent to $1.2197 as Draghi spoke.

The ECB left all its policy measures unchanged and did not touch the statement as expected.

But with the risk of a global trade war still looming, it may not decide until absolutely necessary, so retaining the flexibility to adjust policy.

The president also suggested that the focus of the European Central Bank governing council was on the most recent data rather than revising current forward guidance on monetary policy.

A stronger euro would cap inflation, but would affect growth and exports.

The impact of the euro's strength has been relatively limited so far, however.

It was trading at $1.2175 today, having retraced most of a rally that started in January and took it at one stage as high as $1.2555.

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