Mario Draghi, president of the ECB, said that the central bank now anticipates inflation levels of 1.5 percent in 2017, 1.3 percent in 2018 and 1.6 percent in 2019. This is down from the forecasts released in March, which saw inflation reaching 1.7 percent in 2017, 1.6 percent in 2018 and 1.7 percent in 2019.
The shared currency was previously trading at $1.1240 ahead of the announcement but dropped to $1.1207 against the greenback. At 2.30 p.m. London time it was trading close to $1.220.
Draghi said that the downgrade reflected recent drops in the price of oil, adding that headline inflation is likely to remain at current levels based on current prices for oil futures.