LONDON: The euro briefly rose and bond yields touched a one-month high on Thursday after ECB President Mario Draghi said the central bank had not discussed any plans to extend its quantitative easing programme beyond its scheduled end date in March 2017.
While Draghi added that the central bank's governing council did not discuss "tapering", or eventually scaling back its bond-buying scheme, he said that "current monetary policy cannot stay in place forever".
The single currency rose 0.5 percent to a six-day high of $1.1040, but quickly gave up those gains and headed back towards a three-month low of $1.0952 struck earlier. The euro also rose more than 1 percent against struggling sterling.
German two-year bond yields rose 3 basis points to touch a one-month high of minus 0.64 percent, before edging back slightly.
Implied rates on money market futures and longer-dated bond yields also rose.
The STOXX Europe 600 equity index fell sharply but rose off its lows by 1316 GMT, and was near the level it was when Draghi started to speak. It was still down 0.4 percent on the day.
Recent media reports that the ECB was considering tapering its asset purchases have spooked markets in recent weeks.
"This was not Draghi's finest hour. He really wanted to shut down any suggestion that the ECB is going to taper any time soon.
But he what he actually did was to tell people to come back in December and see what the ECB thinks then," said Aberdeen Asset Management's fixed income investment manager James Athey.
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