Euro slips as ECB ends bond purchases

The euro fell against the dollar on Thursday after the European Central Bank as expected halted new bond purchases and promised to maintain policy support for the euro zone due to risks from trade tensions, Brexit and budget woes in Italy and France.

Sterling held steady following UK Prime Minister Theresa May's prevailing in her party's vote on her leadership the previous day. It had rallied on Wednesday in anticipation as traders bet her win might allow her to negotiate more generous terms for Britain in its exit from the European Union in March.

The dollar strengthened against most major currencies stemming from optimism on some progress between China and the United States to resolve their trade issues, analysts said. "Continuing confidence and increasing caution," was how ECB President Mario Draghi at his news conference described ECB's decision for ending the 2.6 trillion euro ($2.95 trillion), four-year-long quantitative easing program. It will reinvest cash from maturing bonds.

On the other hand, ECB kept its primary rate target at -0.40 percent. It also marked down its outlook on regional growth.

"The balance of risks remains on the downside," said Paresh Upadhyaya, director of currency strategy at Amundi Pioneer Investments in Boston. "It's hard for the euro rally from its current trading range."

At 10:47 a.m. (1547 GMT), the single currency was 0.25 percent lower at $1.13405. Against the pound, it slipped 0.27 percent at 89.815 pence.

Traders' attempt to extend sterling' gains faded on uncertainty on what more May, who is currently in Brussels, could get from EU leaders to improve on her Brexit proposal. On Monday, May scrapped a parliamentary vote on her current plan, sending the pound to a 20-month low against the dollar and triggering a no-confidence vote on her leadership. The sterling was little changed at $1.263, retreating from an earlier peak of $1.2687. An index that tracks the greenback against the euro, sterling and four other currencies was 0.23 percent higher at 97.271.

U.S. President Donald Trump's upbeat comments on trade talks with China and Beijing's first major purchase of U.S. soybeans in months boosted the dollar. "While not settled, sentiment has improved," Upadhyaya said of renewed optimism about U.S.-Sino trade relations.

Among other major currencies, the Norwegian crown had risen as much as half a percent versus the euro and dollar after Norges Bank reiterated its plans for a March rate increase. The crown gave up its earlier gains and was little changed against the dollar and only up 0.15 percent versus the euro.