Mario Draghi succeeded in knocking back the euro's steady rise and reducing lower-rated European government bond yields on Thursday, but markets looked far from persuaded that future unconventional action to boost growth was a done deal.
Reaction was initially tepid to some of the strongest policy statements made by the European Central Bank president since his commitment two years ago to do all it takes to keep the euro area together.
That included a promise that the bank was now unanimously agreed that outright money-printing - or quantitative easing - was an option, a clear sign that German opposition to the idea had weakened.
But about an hour after he expressed worries that the euro's strength could push inflation even further away from target, the euro had stabilized again.
The currency fell by as much as half a cent before recovering to trade at $1.3725, down 0.3 percent on the day. Ten-year Italian yields dropped to their lowest in 8-1/2 years at 3.25 percent.
"It is the first time there has really been an open discussion about quantitative easing," said Alessandro Giansanti, senior rates strategist at ING. "Any such program would clearly have the most benefit for Italy and Spain which have the largest bond markets in the periphery."
But while the moves were significant, they were not among the sharpest seen after previous ECB meetings and the lukewarm market reaction was a sign that investors were still reluctant to take on board Draghi's steer.
Draghi's words reinforced what many had already assumed to be the case: that the ECB does not want the euro to go any higher as it could choke exporters and hurt an economy still struggling in many areas.
"It's a pretty cheap way for the ECB to try to influence the market without putting their money where their mouth is," said Christian Lenk, rate strategist at DZ Bank. "The market has largely priced that before the meeting."
ING referred to it as "The Art of Doing Nothing".
There remain substantial sources of strength for the euro.
Bolstered by Germany, the region as a whole ran a record current account surplus in December and a rally in the bond market suggested money has flooded into the euro zone's poorer south, starved of capital over four years of debt crisis.
Lee McDarby, executive director of UK corporate FX sales at Nomura International Plc, said Draghi had succeeded to push the euro through technical support around 1.3720 but faced other hurdles above $1.370.
That is still a long way above this year's low of 1.34765.
"Before it all got underway our call was for a small euro rally on the back of no action, followed by Draghi talking us down to close the day below 1.37," he said. "It looks like that script is being followed for now."
Money market rates - one of the best gauges of ECB policy expectations - actually pushed 1-2 basis points higher after Draghi's comments, indicating the market perceived the chances of imminent monetary easing to be lower.
But forward euro zone overnight bank-to-bank Eonia borrowing rates stayed below the spot Eonia rate, suggesting markets still attached some probability to that scenario.
"The fact that the Eonia forward curve is inverted out to a year or so suggests the market is looking for some sort of policy easing," said Philip Tyson, strategist at ICAP.
Greek bonds outperformed their euro zone peers, with yields hitting new four-year lows across the curve as the country lined up a group of banks to manage its first sale of a new bond since the country restructured its debt two years ago.
German Bund yields, the benchmark for euro zone borrowing costs, were last 1 bps down on the day at 1.61 percent, from about 1.63 percent before Draghi started speaking.
(Editing by Jeremy Gaunt)