Euro sinks to 11-1/2-year low, bonds gain after ECB
By Richard Leong
NEW YORK (Reuters) - The euro fell to an 11-1/2-year low against the dollar on Thursday as U.S. and euro zone bond prices rose, after the European Central Bank spelled out its 1 trillion-euro stimulus plan that begins next Monday.
European stock prices rose to seven-year highs in advance of the ECB's latest effort to jump-start the struggling euro zone economy, while U.S. equities edged higher as investors awaited direction from the government's monthly labor report due out on Friday.
ECB President Mario Draghi outlined the central bank's quantitative easing program at a press conference following a scheduled policy meeting. He left the door open for more bond purchases beyond September 2016.
"It will have a material effect on a lot of European exporters. We'll see a lot of benefits on the cost side for producers," Xavier Smith, portfolio manager of the Center Global Select Fund DHGRX.O in New York said of the ECB bond purchase plan.
The ECB upgraded its growth outlook for the euro zone to 1.5 percent for 2015. That still trails a 2.8 percent pace seen for the United States.
Brent oil prices ended a tad lower in the absence of a deal with world powers on Iran's nuclear program. An agreement could loosen restrictions on Iran to sell its oil, exacerbating a global supply glut.
The rise in European stock prices was limited by the prospect of an economic slowdown in China, with mining companies falling on the outlook.
Beijing announced a 7 percent growth target for the year and signaled that the lowest rate of expansion for a quarter of a century is the "new normal." Continued...