Euro dips after report claims European Central Bank to cut inflation outlook

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       Don’t look for big steps from Mario Draghi

This is down from the forecasts released in March, which saw inflation reaching 1.7% in 2017, 1.6% in 2018 and 1.7% in 2019.

The common currency was down 0.14 percent at $1.1259 after hitting a low of $1.1205 on reports suggesting the ECB Bank would lower its inflation targets. The measure pumps newly printed money into the economy in an effort to raise inflation toward the bank's goal of just under 2 percent considered best for the economy.

Inflation dynamics are "still dependent on the extension of our current monetary policy", European Central Bank boss Mario Draghi emphasized recently, to help justify his bond purchase program, which will run until the end of 2017 at least. Eurozone monetary policy however looks like it is likely to change only very slowly, with "subdued" core inflation pressures continuing to be a concern for the European Central Bank. The forecast for 2019 was cut to 1.6 percent from 1.7 percent.

The downgrade mainly reflected lower oil prices, Draghi said.

The ECB is keen to avoid financial market upsets as it heads for the exit from its bond-buying programme.

The evidence is piling up that the growth in the eurozone has kicked into a higher gear and the region is recovering from the Great Recession and its crisis over high debt.

The change could lift 2017 growth to 2 percent, Draghi said, higher than the official forecast presented at the start of the press conference for 1.9 percent expansion this year. The written account of the bank's deliberations at its April 27 meeting indicated it felt inflation pressures remained "subdued and had yet to show a convincing upward trend". It removed the possibility for lower rates and saw risks to economic outlook as balanced and not biased to the downside anymore, noted Nordea Bank. Its monthly asset purchases will continue to total 60 billion euros a month and to run until at least December.

The bank left interest rates unchanged in the June meeting and dropped any mention of a rate cut.

Germany, in particular, is the real victim of the ECB's low interest rate policy.

Eurozone's economy expanded more-than-initially estimated in the first quarter on domestic spending.

The Euro fell back towards $1.12 against the U.S. dollar and held above €1.15 against the British pound as European Central Bank President Mario Draghi failed to deliver the headlines that investors had been looking for this week by not giving any indication as to when the ECB would begin the tapering of its huge quantitative easing programme.

Speaking in Estonia, the bank's president Mario Draghi said there was now "a stronger momentum in the euro area economy" and said "the programme was running smoothly".

Meanwhile, the European Central Bank is unlikely to alter its commitment to buying 60 billion euros a month of government and corporate bonds until "at least" December 2017, they said. "The pass-through of our monetary policy has never been so effective as it is today".

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