The European Central Bank (ECB) took no action Thursday, but President Mario Draghi warned that growth risks in the region had shifted to the downside due to a number of external factors.
"The risks surrounding the euro area growth outlook have moved to the downside on account of the persistence of uncertainties related to geopolitical factors and the threat of protectionism, vulnerabilities in emerging markets and financial market volatility," Draghi said at a press conference.
Draghi also reaffirmed the central bank's stance to keep key interest rates at their present levels through the summer of 2019 and "longer, if necessary."
The euro plunged to a one-month low, trading 0.5 percent lower against the dollar after Draghi also acknowledged that near-term data are likely to be weaker-than-expected.
Last month, the central bank formally brought an end to its $2.6 trillion bond-buying program, meaning purchases fell from 15 billion euros a month to zero. It marked a historic moment for the bank as it brought an end to the crisis-era policies in the euro zone, despite coming at a difficult time for Europe.
The ECB, however, kept its plans to reinvest cash from maturing bonds for an extended period of time beyond its next interest rate hike. These purchases are designed to keep borrowing costs down through to sometime in 2021. On Thursday, the ECB announced that it plans to continue this repurchase program for an extended period of time.