"The Governing Council expects the key European Central Bank interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases", the European Central Bank said.

Nonetheless, the ECB President, Mario-Draghi made clear Frankfurt will maintain interest rate policy in a quantitative easing mode, with ultra-low interest rates. But don't look for the European Central Bank to signal a withdrawal from its stimulus efforts at Thursday's meeting. However headline inflation rates have started to roll over in May and core inflation continues to hover around 1 percent.

"We have to be confident that the inflation rate is durably converging toward our objective and that it's a self-sustained convergence", Draghi said.

The ECB said it now saw inflation this year at just 1.5 percent, down from a previous forecast of 1.7 percent.

The ECB kept its rate on bank overnight deposits, which is now its primary interest rate tool, at -0.40%. They have since stayed at zero per cent, 0.25 cent and minus 0.40 per cent respectively. This small lift in growth forecasts did enough to quiet fears of further rate cuts down the road.

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Sources have told Reuters the European Central Bank is likely to nudge up its growth forecasts but trim some of its inflation projections, indicating that its stimulus is working but remains needed.

"So far we haven't had any major surprises or any kind of bombshells released", said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

The sticking point is inflation, which remains weak. Mr. Draghi said policy makers had removed "some of our easing biases" because the risk of severe setbacks that could lead to deflation had been eliminated. The ECB noted that underlying inflation has yet to show convincing signs of pickup.

The euro declined versus all of its G-10 peers and fell below 1.120 versus the dollar, it's lowest this month, amid selling by interbank and short-term trading accounts, some of which were unwinding stale euro longs.

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Inflation on the other hand was now seen lower over that same time horizon, rising by 1.5% in 2017 (instead of 1.7%), 1.3% in 2018 (instead of 1.6%) and by 1.6% in 2019 (instead of 1.7%). The region's economy is now projected to grow by 1.9% this year, versus the prior estimate of 1.8%.

Eurostat said the 19-country euro zone expanded by 0.6 percent quarter-on-quarter and by 1.9 percent year-on-year.

The bank is expected to keep buying 60 billion euros of bonds per month until the end of 2017, with a gradual winding down, or "tapering", of the purchases next year. "We need to continue to accompany the recovery with our monetary policy".

Saxo Bank's John Hardy told CNBC ahead of the announcement that he believed any immediate dip in the euro during Thursday's meeting would be short-lived, but added that the leak may have been used to prevent a euro rally.

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