European shares fall as Draghi remarks keep euro running

European Government Bonds: Too Early For The ECB To Announce A Change In Guidance

U.S. Treasury Secretary Steve Mnuchin said he welcomed a weak dollar, arguing that it was good for U.S. trade, and Commerce Secretary Wilbur Ross said "U.S. troops are now coming to the ramparts" in global trade wars.

He said several European Central Bank policymakers at a meeting on Thursday had questioned a change in US policy.

Barclays bank have forecast the GBP/EUR rate to be nearer 1.17 by the end of the year and the high 1.20s against the US Dollar.

"The recent volatility in exchange rates represents a source of uncertainty which requires monitoring with regard to its possible implications for the medium-term outlook for price stability", Draghi said at a press conference.

In his comments on Thursday, Draghi cited the repeated joint statements by worldwide finance officials in which they commit to refrain from lowering their currencies' exchange rates to gain trade advantage at the expense of other countries.

Still, in a widely expected decision, the European Central Bank kept its key interest rate deep in negative territory, maintained a pledge to hold rates steady until well after bond buys conclude and promised to continue asset purchases until a sustained rebound in inflation.

"The ECB refrained from aggressively pushing back against the strength of the euro at their monetary policy decision.but also warned the US against opening a Pandora's box of competitive devaluation", said William Adams, senior worldwide economist at the PNC Financial Services Group.

If prospects become less favorable or if financial conditions cease to be in line with further progress towards a sustainable adjustment of the inflation trend, the central bankers are ready to increase the size and/or duration of the asset purchase program. Currently, the bank says the purchases will continue at least through September and longer if necessary, leaving the exact end open.

Part of his holding pattern approach, Draghi also kept the bank's guidance unchanged, maintaining a promise to continue asset buys until a sustained rebound in inflation, even after policymakers agreed in December to begin work in early 2018 to draft a new guidance.

The Eurozone countries enjoy the strongest economic growth in a decade. The negative rate is a penalty aimed at pushing banks to lend the money rather than let it pile up risk-free at the ECB.

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