CANBERA (dpa-AFX) - The euro slid against its major counterparts in the European session on Thursday, erasing its recent gains, after the European Central Bank announced that it would halve its monthly bond purchases to EUR 15 billion after September and eventually end them in December.
'The Governing Council anticipates that, after September 2018, subject to incoming data confirming the Governing Council's medium-term inflation outlook, the monthly pace of the net asset purchases will be reduced to EUR 15 billion until the end of December 2018 and that net purchases will then end,' the bank said in a statement.
The Governing Council, led by ECB President Mario Draghi, left the key interest rates unchanged after the policy session in the Latvian capital of Riga, in line with economists' expectations.
The main refi rate is currently at a record low zero percent and the deposit rate at -0.40 percent. The marginal lending facility rate is 0.25 percent.
'Today's monetary policy decisions maintain the current ample degree of monetary accommodation that will ensure the continued sustained convergence of inflation towards levels that are below, but close to, 2% over the medium term,' the bank said.
Final data from Destatis showed that Germany's consumer price inflation accelerated, as initially estimated, on energy prices in May.
Consumer prices climbed 2.2 percent year-on-year in May, faster than the 1.6 percent increase in April but in line with the estimate published on May 30. The last time the inflation rate reached this level was in February 2017.
The currency traded mixed against its major counterparts in the Asian session. While it rose against the greenback and the franc, it fell against the yen. In comparison to the pound, it held steady.
The euro depreciated to a 2-day low of 0.8778 against the pound, following an advance to 0.8821 at 7:45 pm ET. The next likely support for the euro is seen around the 0.86 level.
Figures from the Office for National Statistics showed that UK retail sales growth accelerated more than expected in May.
Retail sales volume including auto fuel, grew 1.3 percent month-on-month, following April's 1.8 percent increase. This was the second consecutive rise in sales and much bigger than the expected 0.5 percent.
The 19-nation currency fell to 1.1744 against the greenback, reversing from a new 4-week peak of 1.1852 it touched immediately after the decision. The euro is seen finding support around the 1.16 region.
The single currency slipped to a 3-day low of 129.03 against the yen, pulling away from a new 3-week high of 130.36 set in the immediate aftermath of the announcement. On the downside, 127.00 is possibly seen as the next support level for the euro.
Final data from the Ministry of Economy, Trade and Industry showed that Japan's industrial production increased more than initially estimated in April.
Industrial production climbed 0.5 percent month-over-month in April, faster than the 0.3 percent estimated earlier. It was the third successive monthly rise.
The euro weakened to a 6-day low of 1.1579 against the franc, after rising to a 3-day high of 1.1648 quickly after the decision. If the euro falls further, 1.13 is likely seen as its next support level.
The euro reversed from its recent weekly high of 1.5358 against the loonie, falling to a 6-day low of 1.5205. The euro is poised to challenge support around the 1.51 level.
Following more than a 2-week high of 1.6841 hit soon after the decision, the euro fell to an 8-day low of 1.6650 against the kiwi. Continuation of the euro's downtrend may see it challenging support around the 1.64 level.
The euro was trading lower at 1.5519 against the aussie, down from near a 4-week high of 1.5693 seen soon after the announcement. Next key support for the euro is likely seen around the 1.54 level.
Looking ahead, U.S. business inventories for April are due shortly.
Copyright RTT News/dpa-AFX