SocGen expects euro-area inflation to hit a 39-month high this week:
"We expect euro area headline inflation to continue to improve for the eighth month in a row and climb to 1.1% Y/Y, the highest reading since September 2013. The negative drag from the energy component is likely to vanish, as a result of positive base effects from energy prices.
"On the food front, we expect the pick-up in EU internal market prices in the last few months to pass through to consumer prices.
"Nevertheless, the improvement observed throughout the various surveys published to date seems to signal improving inflationary pressure in the coming months. Looking ahead, we expect euro area inflation to remain above 1.0% next year, averaging 1.5% in 2017, with the core metric improving slightly to 1.0%."
The dollar is climbing back towards a 14-year high after Janet Yellen flagged strength in the U.S. jobs market, while fallout from attacks in Germany, Turkey and Switzerland are putting pressure on the euro, pushing the currency back below $1.04.
Many economists have predicted parity with the greenback for years, arguing that the dollar would appreciate as the Fed embarked upon a path of monetary-policy normalization, but those forecasts didn't look likely to pan out until recently.
"The extension of purchases over a longer horizon allows for a more sustainable market presence," said Mario Draghi at the start of his press conference.
Some tweaks were announced to the eligibility criteria for bonds bought under the ECB's asset-purchase program. Bonds with a maturity of one year will now be eligible (previously shortest maturity eligible was two years) and officials will no longer exclude bonds with yields lower than the ECB's deposit rate.
The euro has quickly given back gains to trade down 1% at $1.0646 as the threat of wider peripheral spreads weigh on the currency.
The euro (NYSEARCA:FXE) has managed to climb back to positive territory vs. the greenback in the past couple of hours, but if it closes the session in the red, it would be the 10th consecutive day of losses - thus extending its longest-ever losing steak against the dollar.
At its high on election night, the euro was at $1.13, but this morning can buy just $1.0622. The next level technicians are watching is the $1.0538 low hit last December. Beyond that, there's the $1.0456 hit in March 2015.
Central banks from India to Indonesia have stepped in to stabilize their currencies on deepening concerns that Donald Trump will pursue policies that spur capital outflows from developing economies and weaken their exports.
Meanwhile, the dollar is on course for its best week in a year, racking up another round of gains against the yuan and peso and steadying just off the previous day's highs against the euro and yen.
While the vast majority of watchers hadn't expected any policy changes today, many had anticipated some movement towards expanding or extending the bank's QE program, which is slated to end early next year.
Flat on the session moments ago, the euro is now higher by 0.5% vs. the dollar. The Stoxx 50 has turned lower by 0.25%.