Euro gains, U.S. stocks flat; ECB signals end to rate cuts

Thu Mar 10, 2016 4:58pm EST
 
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By Caroline Valetkevitch

NEW YORK (Reuters) - The euro jumped while U.S. stocks ended flat on Thursday as new stimulus measures by the European Central Bank were offset by a signal from its chief Mario Draghi that it would cut interest rates again only in the most extreme of circumstances.

Investors had initially cheered the ECB's announcement that it will cut rates to fresh record lows, start buying corporate debt for the first time and effectively begin paying banks to borrow from it to lend to companies and households.

That optimism dissipated as Draghi suggested that years of interest rate cuts may finally be at an end.

"Rates will stay low, very low, for a long period of time and well past the horizon of our purchases," Draghi said, referring to the bank's asset purchase program, due to end in March 2017.

But "from today's perspective and taking into account the support of our measures to growth and inflation, we don't anticipate that it will be necessary to reduce rates further."

The euro EUR= recovered from six-week lows against the dollar of $1.0823 to trade at a three-week high of $1.1217 as money market rates in the euro zone rose on reduced expectations for further deposit rate cuts. The euro was last at $1.1120, up 1.1 percent.

Gold rose as the euro bounced. U.S. gold futures GCv1 for April delivery settled up 1.2 percent at $1,272.80 an ounce.

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Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York March 9, 2016. REUTERS/Lucas Jackson