LONDON Dec 8 The euro jumped to a 1-month high
against the dollar and long-dated German bond yields hit their
highest in almost a year on Thursday after the ECB said it would
reduce the pace of its programme of quantitative easing for the
economy from April.
The bank extended its current programme until the end of
next year, but said that purchases would proceed at 60 billion
euros a month, compared to the current 80 billion euros.
The euro surged by almost a cent after the bank's statement
to hit $1.0875, but it quickly retreated to $1.0753 - flat on
After initially turning negative following the ECB
announcement, European shares extended gains with the STOXX last
trading up 0.6 percent, underpinned by strong gains among
banking sector stocks.
Euribor money market futures <0#FEI:> fell as much 8 bps
across the 2017-2020 curve as investors moved to price in a slim
chance of a rise in euro zone interest rates late next year.
"The bank has extended its quantitative easing program until
December which is more than what the market was expecting," said
Naeem Aslam, chief market analyst at ThinkMarkets.
"However, the bank is going to reduce their firepower after
March and will only be purchasing 60 billion. So you can say
that the bank is tapering in a more dovish way."
(Reporting by London markets team)