2018.04.2621:10:00UTC+00Euro Drops to 3-Month Low After ECB Meeting

The euro weakened after European Central Bank President Mario Draghi mentioned “solid” economic growth but held interest rates unchanged.

The ECB left interest rates unchanged and renewed its pledge to continue asset purchases through the end of September. ECB President Mario Draghi played down soft first-quarter data in the eurozone, but also indicated that policy makers want to get a better grip on the causes of the slowdown before proceeding towards tapering the bank's ultra loose monetary policy.

The common currency dropped to its weakest against the dollar since mid-January, at $1.2096, after the ECB kept monetary policy unchanged. The euro had initially bounced back after Draghi played down concern over recent weakness in data.

Draghi said he remained confident in inflation convergence with the central bank's target of near but below 2%, even as inflation figures in the eurozone have been subdued. Economic data in the euro bloc has disappointed of late, showing a slowdown of economic expansion, but Draghi reiterated that it growth should remain solid and broad-based, underpinned by global growth.

The dollar index,which gauges the U.S. currency against a basket of six major peers, climbed 0.46 percent, with the euro 0.46 percent lower at $1.2103.

Earlier, the EUR/USD pair hit a session-high of $1.2210.

A sharp sell-off in bonds over the last week has been pushing up global borrowing costs, putting additional focus on when the ECB will end its 2.55 trillion euro ($3.2 trillion), three-year stimulus program.