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LONDON (Reuters) - The euro slipped against the dollar on Thursday, after the European Central Bank left its aggressive stimulus policy unchanged and repeated that it expects interest rates to remain at record lows for an extended period.
While the ECB removed a reference to the possibility of further rate cuts, it reiterated its standard guidance that it expects the key interest rate to remain at its present level well past the horizon of its asset purchases.
After initially edging higher, the euro fell against a broadly stronger dollar to $1.22165 after the statement, down from $1.1241. That left it down around a third of a percent on the day.
"They have omitted the guidance that interest rates might be cut, but they have kept all their other easing measures in place and the comment that QE could be extended if needed," said Sonja Marten, senior FX strategist at DZ Bank.
"Maybe the market was looking for a more hawkish signal."
Euro zone government debt markets were little changed, with yields on most 10-year bonds remaining 1-3 basis points up on the day.
Europe's STOXX 600 was also little changed after decision, and euro zone stocks remained up 0.3 percent. Euro zone banks briefly gained, trading up 1.7 percent on the day.
Reporting by Jemima Kelly, Helen Reid and John Geddie; Editing by Nigel Stephenson