European Central Bank President Mario Draghi intended to signal tolerance for a period of weaker inflation, not an imminent policy tightening, when his comments sent the euro higher this week, sources familiar with Draghi’s thinking said on Wednesday.
The ECB declined to comment.
Draghi’s comments on Tuesday, taken as a hawkish swing, sent the euro and bond yields sharply higher.
The sources said Draghi wanted to acknowledge the recent, strong economic data and prepare the market for an autumn decision on the future of the ECB’s 2.3 trillion euros bond-buying programme but without making any commitment.
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