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Euro Falls as ECB Signals No Major Shift in Stance With Statement


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By Geoffrey Smith — The euro fell around half a cent against the dollar and Eurozone bond yields fell after the European Central Bank chose not to signal any meaningful change in its policy stance after its regular council meeting on Thursday. 

By 8:25 AM ET (1225 GMT), the EUR/USD was at $1.0885, flat on the day, having fallen from $1.0915 immediately before the bank announced its policy decisions to as low as $1.0865. As expected, it kept all its official rates unchanged. Eurozone 10-year bond yields were mostly down by 1 or 2 basis points.

The meeting was the last scheduled chance for eight weeks for the ECB to respond to an increasingly alarming overshoot in inflation, which hit 7.5% in March. That’s the highest since the single European currency was created in 1999, while for many individual member states of the Eurozone, inflation is now running at its highest in 30 years or more.

The ECB said that the economic data released since its last meeting had confirmed its intention to end net bond purchases in the third quarter. However, with an eye on the huge uncertainty for the Eurozone economy created by the war in Ukraine, the bank said that its future policy “will depend on the incoming data and the Governing Council’s evolving assessment of the outlook.

“In the current conditions of high uncertainty, the Governing Council will maintain optionality, gradualism and flexibility in the conduct of monetary policy. the Governing Council will take whatever action is needed to fulfill the ECB’s mandate to pursue price stability and to contribute to safeguarding financial stability.”

The ECB defines price stability as an inflation rate of 2% over the medium term. 

Euro Falls as ECB Signals No Major Shift in Stance With Statement

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