Euro falls to fresh 11-1/2 year low as Draghi announces details of QE: Mar 6, 2015

Market Review - 05/03/2015 23:14GMT 
 
Euro falls to fresh 11-1/2 year low as Draghi announces details of QE

The single currency fell to a fresh 11-1/2 year low against the greenback on Thursday after ECB's Draghi confirmed the central bank's QE program will commence next week and will go on until September 2016, at least.

ECB's Draghi said 'to start bond-buying on Mar 9; will also continue buying ABS, covered bonds; buys to be carried out until Sep 2016; bond buys will continue until we see sustained change in inflation path; already seen positive effects fm bond buying plan; additional easing of monetary stance enforces emergence of favourable developments; measures will contribute to substantial return of inflation twds the target; latest eco data point to further improvements in activity at start of this year; sees recovery broadening n firming; risks surrounding economic outlook for the euro area remain on the downside, but are diminished; see inflation gradually increasing later in 2015.'

Earlier in the day, the single currency remained under pressure throughout Asia and weakened to 1.1026 ahead of European open before rising briefly to session high at 1.1115 at New York open. However, euro swiftly pared its gains and tumbled to a fresh 11-1/2 year trough at 1.0988 in New York afternoon on ECB's launch of its massive QE programme and as Draghi hinted at a chance of the program extending beyond September 2016.

Versus the Japanese yen, the greenback traded with a firm bias in Asia and gained throughout European session. Dollar then rose briefly to session high at 120.40 at New York open, however, price tumbled to 119.96 after the release of poor U.S. jobless claims. Later, price pared its losses and recovered to 120.26 in New York afternoon.

U.S. jobless claims rose to 320K fm 313K previously n forecast of 295K.

The British pound also remained under pressure in Asia and weakened to 1.5225 ahead of European open before rebounding to 1.5270 on dollar's weakness post the release of U.S. jobless claims. However, renewed selling there pressured the pair lower and cable fell to session low at 1.5215 in New York afternoon.

On the data front, ECB and BoE left their benchmark rates unchanged at 0.05% and 0.50% respectively.

Data to be released on Friday:

Japan leading indicator, Germany industrial output, France exports, imports, budget balance, Swiss CPI, Italy producer prices, EU GDP, Canada building permits, exports, imports, trade balance, U.S. non-farm payrolls, private payrolls, average earnings, unemployment rate and international trade.