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Euro gains as ECB holds off on fresh easing
[NEW YORK] The euro rebounded on Thursday after the European Central Bank refrained from expanding its stimulus, putting off a possible full quantitative easing program to early next year.
As analysts said German opposition appeared to have blocked a move at this time, ECB President Mario Draghi stated after a policy meeting that the central bank is gearing up for action sometime in early 2015.
After falling sharply in expectation of some action from the ECB now, the euro reversed course against both the dollar and yen, rising to US$1.2380 and 148.27 yen.
The ECB cut its growth and inflation forecasts for the eurozone, and Mr Draghi said it would assess the impact of existing easing efforts to boost growth shortly.
"Should it become necessary to further address risks of too prolonged a period of low inflation, the governing council remains unanimous in its commitment to using additional unconventional instruments within its mandate. This would imply altering early next year the size, pace and composition of our measures," he said.
Mr Draghi stressed that "early next year" does not necessarily mean the ECB's January meeting.
"The ECB is very concerned with falling economic growth and inflation expectations, but has not seen enough evidence that the benefits of QE would outweigh the risks at this point," said Matt Weller at Forex.com.