The euro struggled to hold gains on Thursday after the ECB ended its vast bond purchase program.
Traders worried that the central bank’s president would signal growing pessimism about economic growth. The euro traded up 0.1% at $1.1389 immediately after the ECB announcement. However, the single currency traded down to $1.1367, unchanged on the day.
Further, The ECB’s governing council confirmed they will stop expanding QE from the end of December. The bond purchases will fall from 15 billion euros a month to zero. This announcement marks a historic moment for the ECB, as President Mario Draghi dismantles one of his most contentious policies.
ECB introduced this asset purchasing program in March 2015 to rescue the eurozone economy from deflationary forces and rebuild confidence.
The ECB also said it would continue to reinvest cash from maturing bonds for an extended period of time. The European Central Bank also kept benchmark interest rates on hold.
The ECB meeting comes a week ahead of the Federal Reserve’s December meeting, where it is expected to raise interest rates.
The single currency has largely traded in a $1.16-$1.12 range since August. This happened particularly after the dollar’s 8-month rally slowed on signs the FED will stop raising rates sooner than expected.
START TRADINGForex – Commodities – ECB ended its vast bond purchase program
Against a basket of its rivals, the dollar index slipped 0.1% 96.969 before recovering. Signs of easing Sino-U.S. trade tensions and expectations that China will increase support for its cooling economy helped market sentiment.
The Australian dollar — a gauge of China’s economic fortunes — gained 0.2% to $0.7235.
Sterling remained the big story. The British currency was up 0.4% to $1.2687 before settling around$1.2650.
The yen shed 0.2% to 113.46 and 0.2% against the euro to 129.01 yen.
In commodities, oil falls below $60 a barrel as inventories stay high and a smaller-than-expected draw down in U.S.crude stockpiles. Brent crude LCOc1 was down 30 cents at $59.85 per barrel by 1425 GMT. U.S. light crude CLc1 was 50 cents lower at $50.65.
Sources: Reuters, CNN money, Bloomberg
PLEASE NOTE The information above is not investment advice.