The European Central Bank said Thursday that it will trim the pace of its quantitative easing program, while keeping its key interest rates unchanged, and continue purchasing government, corporate and agency bonds for a further nine months.
"From January 2018 the net asset purchases are intended to continue at a monthly pace of €30 billion 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 ECB said.
"The Governing Council continues to expect the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases," the statement added.
The dovish tone to the QE changes, put downward pressure on the euro, which was trading near a one-week high prior to the announcement, as investors cut long positions upon seeing the Bank's commitment to long-term policy easing by reinvesting purchases made in the program "for an extended period of time ... and in any case for as long as necessary".
The euro was marked 0.45% lower against the U.S. dollar at 1.1760 immediately following the decision after hitting a session high of 1.1813 just prior to the release. Benchmark German government bond yields were also active, falling 3 basis points to 0.45%.