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ECB's strong hint on easing next month sends euro lower

The euro weakened on Thursday after European Central Bank chief Mario Draghi said the bank was prepared to further ease monetary conditions next month if the economy needed it.

NEW YORK: The euro weakened Thursday after European Central Bank chief Mario Draghi said the bank was prepared to further ease monetary conditions next month if the economy needed it.

As expected the ECB decided Thursday to hold off on any action for the moment, despite facing a very low rate of inflation and what many say is a very overvalued euro.

But in a surprise departure from the bank's previous policy of never pre-committing on interest rate moves, Draghi said the monetary policy makers were now sufficiently concerned to take more action.

The governing council was "dissatisfied" with the current path of inflation and was "not prepared to accept it as a fact of nature," Draghi said.

As a result, the governing council "is comfortable with acting next time," he said.

But he added that "we want to see the staff's projections that will come up in early June."

At 2100 GMT Thursday     Wednesday

EUR/USD $1.3840               $1.3911

USD/JPY 101.66 yen          101.87 yen

EUR/JPY 140.69 yen          141.74 yen

GBP/USD $1.6931              $1.6953

EUR/GBP 0.8173 pound    0.8204 pound

USD/CHF 0.8800 franc      0.8761 franc

EUR/CHF 1.2180 franc      1.2188 franc

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