Nobody told the euro that Mario Draghi was dovish

Draghi said a "very substantial degree of accommodation" was needed to boost inflation, and that the central bank's bond-buying quantitative easing programme would continue until inflation picked up.

The ECB left its key interest rates and massive stimulus unchanged for an eleventh straight session, and also kept the forward guidance intact, thus retaining the downward bias on asset purchases.

If Mr Draghi is optimistic for the immediate future and suggests the bond buying program will be tapered back then that could result in the GBP/EUR exchange rate moving towards the 1.10 level.

The bond-buying programme, together with ultra-low interest rates, was created to fend off the threat of deflation hitting the eurozone. Inflation stood at 1.3 percent in June, higher than expected but still below the bank's target of 2 percent.

The UK blue-chip index closed 58 points, or 0.8%, higher at 7,489, as the pound tumbled against the soaring euro, down 1.3% at €1.116.

"Traders may have found that Draghi's comments were less dovish than anticipated, despite his emphasis on the continued need for significant stimulus and on subdued underlying inflation".

"Draghi's choice to state that the European Central Bank remain willing to raise QE if necessary was largely disregarded, for we all know that given the current rate of economic improvement, it is only a matter of time until Draghi changes his tone".

Sevilla signs Nolito from Manchester City
The arrival of Nolito adds to those of Luis Muriel, Ever Banega, Guido Pizarro and Sebastien Corchia. It is thought that the deal to take Nolito back to Spain is worth around €9 (£7.9m).

Chicago futures speculators had at the same time sold the yen believing that the Bank of Japan would stick to its loose monetary policy at Thursday's monetary meeting, with their net short position at two-year highs.

While most market players expect the European Central Bank will announce at its next meeting in September that it will start tapering its asset purchases, a move this week is not completely ruled out.

The bank also retained its asset purchases of Euro 60 billion a month till December 2017, or beyond, if necessary. The figure for June beat expectations to rise 0.6% month-on-month, above the 0.2% forecasted expansion and the 1.2% decline recorded in the previous month. He said that eventually those factors would fade, but added, "Are we there yet?"

Analysts think the European Central Bank will have to end the program by the end of next year in any case because it will run out of available bonds to purchase. But it was still near Tuesday's more than one-year high against the greenback of $1.1583.

The dollar index remained near Tuesday's lows after Republicans failed late on Monday to pass a healthcare bill, raising doubts about President Donald Trump's agenda, and as markets have begun to doubt the Federal Reserve's ability to hike interest rates again this year given weak USA economic readings.

Philadelphia-area manufacturing activity grew at a notably slower rate in the month of July, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.

  • Ronnie Bowen