"The fact that it no longer expects interest rates to remain at present "or lower" levels is a clear deliberate signal that policy makers are gradually becoming more hawkish", said London-based Craig Erlam, senior market analyst, at OANDA.
Governing Council decided today in their meeting in Tallinn to maintain the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility at 0.00%, 0.25% and -0.40% respectively.
The governing council expects the key European Central Bank interest rates to well past the horizon of the net asset purchases, said the European Central Bank press release.
Yet rate setters did not even discuss winding down the ECB's 2.3 trillion euro (US$2.6 trillion) asset purchase scheme, kept rates below zero, and pledged very substantial accommodation.
However, the Governing Council retained the option to top up its quantitative easing programme should the outlook turn "less favourable" or tighter financial conditions threaten the ECB's price stability objective. USA stock indexes are also pointed toward modestly higher openings when the NY day session begins. Draghi said risks to growth are now "broadly balanced" - a tweak from last time out when risks were "tilted to the downside".
The late surge that we saw in the polling data for Labour UK at the moment looks like it has reflected at the voting booths and that Theresa May's gamble could not have paid off.
Draghi made the statement as the central bank lowered its forecasts for inflation this year to 1.5 percent from 1.7 percent, and for next year to 1.3 percent from 1.6 percent.
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EUR/USD spiked to 1.1262 for a high following the 07:45 ET policy statement by the European Central Bank (ECB), then reversed sharply to the downside, with the session low now standing at 1.1217.
Underlying support for the US Dollar is likely to remain ahead of next week's Federal Reserve interest rate decision. In the year to May it was 1.4 percent and the European Central Bank doesn't expect much change over the coming two years.
In a much-awaited update on the future of its extraordinary monetary policy, the bank removed some phrasing from its guidance, suggesting a further decrease in inflation rates is unlikely.
Core inflation was 0.9 per cent, down from 1.2 per cent previously. And remember, price stability-as defined by the inflation target-is the ECB's sole policy mandate. Draghi said inflation indicators "have yet to show convincing signs of a pickup".
However, the general tone of the press conference was dovish.
That mixed outlook had been expected to underpin the case for keeping the ECB's easy policy in place, including the commitment to cut rates further if necessary.
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