The euro hit an 11-year low against the dollar and the region’s stocks nudged higher on Thursday, as the European Central Bank prepared to provide the finer details of its soon-to-be-launched 1 trillion euro stimulus plan.
The common currency fell to as low as $1.1026, its lowest level since September 2003 and the region’s stock.
The slide in the euro came as the dollar continued to claw higher on bets the U.S. Federal Reserve — in sharp contrast to the ECB — is heading for its first rate hike in almost a decade this year.
For the last six week’s the ECB has been working on exactly how it will choreograph the massive quantitative easing plan sketched out in January amid lingering resistance from countries such as Germany and technical issues that need ironing out.
“Are they going to do it as any auction… will they look at the full German curve but only out to five years on BBB rated countries, or will they be happy to look at 10-years on all countries until they can’t buy anymore.”
Euro zone borrowing costs lurked around record lows as traders put the finishing touches on positions ahead of the ECB’s 0830 ET post-meeting news conference.
The ECB will also provide new euro zone economic forecasts at its meeting later that are expected to see their first upgrade to growth expectations for a long time. It is also expected to keep the pressure on Greece by maintaining the current ban on the use of Greek bonds in its lending operations.
Asian stocks had slipped overnight after Wall Street had continued to pull back from record highs ahead of Friday’s closely-watched U.S. jobs data that will give further clues on how likely the Fed is to start raising rates.
As well as the ECB, 20 other central banks around the world have either cut interest rates or eased monetary policy in some form so far this year.
With the U.S. Federal Reserve one of the few going in the other direction, the dollar hit an 11-year high against a basket of major currencies as 10-year Treasury yields US10YT hovered near two-week highs at 2.134.
In commodities, U.S. crude oil added to overnight gains, rising 0.4 percent to $51.73 a barrel, and Brent gained 0.1 percent to $60.59 a barrel. The lack of a deal in talks over Iran’s nuclear program allayed fears of an imminent rise in oil supply from the OPEC nation, supporting oil.
Precious metal gold, meanwhile, was flat at $1,200, while its industrial metal counterparts copper and recently under-pressure aluminum were all little changed.