Following recent US Dollar weakness on the back of the White House's rumoured plans to ramp up protectionist trade policies, investors were shocked to hear that Mnuchin was welcoming the recent US Dollar losses.
An unexpected uptick in United Kingdom weekly earnings in the three months to November prompted the Euro to Pound (EUR/GBP) exchange rate to slump sharply.
Draghi went on to say: "The recent volatility in the exchange rate represents a source of uncertainty.with regard to its possible implications for the medium-term outlook for price stability".
The US dollar has fallen 14.6 percent against the euro since Mr Trump took office a year ago, including a 1.8 percent drop in the two days since Mr Mnuchin's remarks.
"The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases", the central bank said in a statement. The corresponding index is seen at 112.3 in January versus 112.5 in December.
"The explicit targeting of the exchange rate is something that goes back many many years ago", he insisted.
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Out of Europe, monthly retail sales in Canada - due at 1330 - are said to slow down in November, growing by 0.8% compared to a rise of 1.5% seen in the previous month, while excluding automobiles the measure is forecasted to grow at October's pace of 0.8%. The market was also waiting in anticipation for Draghi to make his press conference later in the day and a part of the market was expecting him to talk down the euro as it felt that the European Central Bank would be uncomfortable with the quick and unfettered rise of the euro against the other currencies, especially the dollar. The Governing Council expects the key European Central Bank interest rates to remain at their current level for a long time and far beyond the net asset purchase horizon.
Some market participants are also concerned that Trump may encourage more protectionist policies at a speech in Davos around 1300 GMT and at his State of the Union speech next week, policies that may ultimately end up pushing the dollar lower. "Suggesting that rates were highly unlikely to rise this year was moderately dovish but in context not particularly so - interest rate expectations were already firm set for a 2019 hike", added ETX's Wilson.
After the close of trading on Thursday, results are expected from Intel Corp and Starbucks Corp. "It's not that we were arguing but we were debating the pros and cons. the big cloud over the forecast, as well as our discussion, is NAFTA", Poloz told a news conference.
Britain, undergoing its own tricky negotiations as it tries to untangle itself from the European Union, is facing the opposite problem to the currency bloc with a weaker sterling since the Brexit vote driving nflation well above the Bank of England's target of 2 percent.
Jane Foley of Rabobank mentioned that "Draghi failed to surprise the market", and "The economic data is too strong", Most analysts also pointed that despite what Draghi said, the market and the whole Eurozone can still expect a tighter monetary policy.