The Euro fell against the dollar on Thursday, after the European Central Bank (ECB) announced its move to slash its bond-buying scheme.
The ECB has had in operation a €60 billion-a-month quantitative easing programme since 2015 to aid recovery in the Eurozone.
However, with rebounding confidence in European economies, the central bank has adopted to slash its its bond-buying scheme in half to €30 billion.
ECB President Mario Draghi is expected to announce that the policy will be undertaken gradually, to avoid de-stablising the markets.
Consequently, the European quantitative easing programme is expected to be extended for another nine months until September.
In addition, the bank announced that interest rates will remain at their current levels.
Subsequently, the euro has fallen $1.1770 against the greenback in the immediate aftermath of the release.
Commenting on today’s announcement, Neil Wilson, senior market analyst at ETX Capital, said: “It looks like the ECB is managing a taper without a tantrum.
“For the first time in many meetings we got a truly different policy statement and one that seems to strike a pretty good balance between the hawks and the doves.”
Similarly, Emmanuel Lumineau, Chief Executive at BrickVest, said:
“Today’s announcement is a glowing endorsement of healthy Eurozone growth and falling unemployment, which will more than likely mean that interest rates will stay at historic lows until at least 2019 in order to help financial markets adjust.”
Mr Lumineau noted that disparities between monetary policy in the U.K and within Europe. He continued:
“In contrast to the UK where interest rates are expected to rise for the first time in more than a decade, the Eurozone appears to be concerned about low inflation which has consistently remained well below its target.”
This follows a disappointing set of UK retail figures from the CBI’s monthly survey, which revealed that retailers are severely beginning to feel the strain of Brexit-related headwinds, with sales plunging at their fastest rate since 2009.
President Mario Draghi is set to deliver his comments on the monetary policy decision, following the ECB press release.