March 7, 2019 / 9:17 PM / 9 months ago

FOREX-Euro craters to mid-2017 lows as ECB restarts stimulus

    * ECB delays rate hike, readies to lend more to banks
    * Latest ECB move knocks neighboring European currencies 
    * Dollar index rallies to highest since December
    * Canadian, Aussie dollar hover at two-month lows
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Updates to late U.S. market action)
    By Richard Leong
    NEW YORK, March 7 (Reuters) - The euro tumbled on Thursday to its lowest against the dollar since June
2017 after the European Central Bank postponed the timing of its first post-crisis rate hike to 2020 at
the earliest and launched a new round of cheap loans to banks.
    The single currency suffered its worst day versus the greenback since the ECB previously delayed its
rate-hike plan almost nine months ago. 
    The ECB's decision to tweak its forward guidance on rates was a surprise for many investors. The
central bank also cut its growth and inflation forecasts through 2021.
    "The ECB has no choice," said Joseph Trevisani, senior analyst at FX Street in New York. "There are a
lot of internal problems which are impediments to growth."
    Anemic domestic demand and political tensions will unlikely be resolved by an easy ECB policy stance
and would keep downward pressure on the euro, analysts said.
    Currencies of European countries not part of the euro zone, such as the Swedish crown and Hungarian
forint, fell hard after the ECB's decision, which is aimed at battling deteriorating regional business and
consumer activities, analysts said.
    On the other hand, the greenback reached a new 2019 high against a basket of currencies that includes
the euro as traders bet the United States would fare better than Europe in the coming months despite some
soft patches in the U.S. economy.
    The euro sagged to $1.11765, its lowest level since mid-2017. It was last 1.12 percent lower
at $1.1181 in late U.S. trading.
    The single currency recorded its biggest one-day loss against the greenback since June 14, 2018 when
the ECB pushed back plans for a rate hike into the summer of 2019.
    The euro is at risk of falling to $1.10 in the coming weeks, analysts said. 
    The Swedish crown fell to its weakest since Dec. 15, 2016 at 9.476 per dollar. It was down
0.66 percent at 10.586 per euro, Reuters data showed.
    The Hungarian forint shed 1.38 percent against the dollar and slipped 0.2 percent against the
euro.
    The ICE index that tracks the dollar against a basket of six major currencies was up 0.84
percent at 97.685 after touching 97.71, which was its highest since Dec. 17.
    "I don't think you will get much more on the upside," Aaron Hurd, senior portfolio manager in the
currency group at SSGA in Boston, said of the greenback. "It will likely stay in a range."    
    Among other G10 currencies, the Canadian and Australian dollars hovered at two-month lows after
investors bet their central banks would ease monetary policy as their economies slow.
    The Aussie was down 0.33 percent at $0.70085, while the loonie was down 0.16 percent
at C$1.3464.
========================================================
    Currency bid prices at 4:02PM (2102 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1181        $1.1305     -1.10%         -2.51%      +1.1321     +1.1177
 Dollar/Yen       JPY=        111.6100       111.7500    -0.13%         +1.22%      +111.8500   +111.4900
 Euro/Yen         EURJPY=     124.79         126.35      -1.23%         -1.13%      +126.4300   +124.6800
 Dollar/Swiss     CHF=        1.0119         1.0048      +0.71%         +3.11%      +1.0124     +1.0036
 Sterling/Dollar  GBP=        1.3071         1.3169      -0.74%         +2.46%      +1.3185     +1.3070
 Dollar/Canadian  CAD=        1.3458         1.3440      +0.13%         -1.31%      +1.3469     +1.3413
 Australian/Doll  AUD=        0.7008         0.7032      -0.34%         -0.58%      +0.7051     +0.7005
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1316         1.1364      -0.42%         +0.55%      +1.1368     +1.1315
 Euro/Sterling    EURGBP=     0.8552         0.8583      -0.36%         -4.81%      +0.8625     +0.8538
 NZ               NZD=        0.6747         0.6767      -0.30%         +0.45%      +0.6791     +0.6746
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.7903         8.6634      +1.46%         +1.75%      +8.7998     +8.6563
 Euro/Norway      EURNOK=     9.8299         9.7968      +0.34%         -0.77%      +9.8421     +9.7828
 Dollar/Sweden    SEK=        9.4655         9.2986      +0.64%         +5.60%      +9.4762     +9.2886
 Euro/Sweden      EURSEK=     10.5840        10.5162     +0.64%         +3.12%      +10.6010    +10.5059
 
    
 (Additional reporting by Tommy Wilkes in LONDON
Editing by Susan Thomas and Diane Craft)
  
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