'We're not there yet, financing conditions favourable' ECB's Draghi says

"We're not there yet", European Central Bank chief Mario Draghi said in his press conference when asked whether monetary policy needed to remain as accommodative as it was.

However, when asked about the recent strength in the single currency, Draghi stressed that financial conditions overall remained favourable.

As of 1359 BST euro/dollar was higher by 0.43% to 1.1566.

In remarks to reporters, Draghi explained there were "no convincing signs" of a pick-up in price pressures.

Indeed, core inflation was seen rising "gradually" over the medium-term, he added.

Judging from his responses during the question and answer session following his introductory statement, euro area rate-setters took no additional steps towards dialing back their accomodative monetary policy.

Rather the opposite, with Draghi also reiterating that expectations for inflation in the euro area to converge with the ECB's target remained conditional on the amount of stimulus then in place, remaining so.

Rate-setters needed to be "persistent", "patient" and "prudent", he said.

Governing Council members had also been unanimous in their decision not to set a date for discussions on when to discuss changes to their guidance, simply agreeing that they should occur in the fall.

Asked about the recent strength of the single currency, Draghi stressed that financial conditions overall remained favourable.

"After financial markets overreacted to Mario Draghi’s Sintra speech, the ECB played it safe today," said Berenberg's Holger Schmieding.

"Of course, if the economic outlook were to change materially, the ECB may move more slowly or a little faster. Although a small chance remains that the ECB will try to appease its resident hawks and its outside critics somewhat by easing the burden which the negative deposit rate places on banks before late 2018, the overdone market reaction to Draghi’s thoughtful but neutral Sintra speech has probably made the ECB even more cautious than before."

PNC Financial's Bill Adams added, "the key takeaway from the Governing Council’s statement is that they will withdraw stimulus “only gradually” in 2018 and beyond.

"These statements are consistent with PNC Economics' expectation for a slow taper of QE in 2018 and an initial policy rate hike in 2019. The ECB's benchmark deposit rate will likely still be negative when President Draghi leaves office on Halloween 2019."