The European Central Bank held its key rates steady Thursday, adding its unlikely to change them until at least the end of the year, sending the euro sharply lower against the U.S. dollar and underscoring the weakness of the world's biggest economic bloc.
The ECB had planned to modestly tighten its monetary policy near the end of this summer, but said Thursday that rates will remain "at their present levels at least through the end of 2019", a move that not only marks a sharp change in the bank's guidance but also guarantees that ECB President Mario Draghi will serve out his seven year term in Frankfurt without ever having raised interest rates.
The Bank also said it would launch a new lending program for the region's commercial banks, known as targeted longer-term refinancing operations, TLTROs, which will start in September and last for at least two years.
The ECB decisions pushed the euro to 1.277 against the U.S. dollar, a 0.3% decline on the session and a move that extends the currency's six-month side to around 4.22%.
Benchmark 10-year German bund yields, a proxy for risk-free interest rates in the currency area, fell to 0.109%, while the Stoxx Europe 600 index pared declines to a 0.21% fall on the session.