The European Single Currency, euro consolidated gains at a one-week high on Thursday, December 14, after the European Central Bank kept its ultra-easy policy stance unchanged, an outcome that was widely expected by financial markets.
“The ECB took some quite big steps a few weeks ago and nothing new was expected today,” said Thu Lan Nguyen, an analyst at Commerzbank in Frankfurt.
“If there was anything that markets were looking out for was a possible change in timing of the first rate hike but we are quite a long way from that.”
Six weeks after agreeing to halve asset buys from January, the bank reiterated its commitment to continue bond purchases at least until the end of September, and to keep reinvesting cash from maturing debt until much later to support a rebound in growth and inflation.
Against the dollar, the euro was flat on the day at $1.18275. It has risen more than 2.5 percent over the last month and was trading at a one-week high.
The euro has been the standout performer among the major G10 currencies this year, gaining than 12.5 percent against the dollar so far this year as growth expectations have overtaken other drivers for the currency such as interest rate differentials and capital flows.
Though the Fed delivered a quarter percentage point rate hike as widely expected, some analysts expected policy-makers to sound a more upbeat note on the economy thanks to a U.S. tax bill that may become reality over the next few weeks.
The Fed projected three more hikes in both 2018 and 2019, unchanged from the last round of forecasts in September and said the tax overhaul would boost the economy next year but leave no lasting impact, with the long-run potential growth rate likely stalled at 1.8 percent.
