September 4, 2014 / 12:06 PM / 3 years ago

RPT-Euro falls, European stocks and bonds rise after ECB rate cuts

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LONDON, Sept 4 (Reuters) - The euro fell to its lowest in more than a year against the dollar, while European stocks and bonds rose sharply on Thursday after the European Central Bank cut interest rates to record lows to lift inflation.

The FTSEurofirst 300 index of European blue-chips rose to a two-month high after the ECB decision to trade 0.8 percent up on the day at 1,396.08 points.

Bund futures rose to the day’s high of 151.33, up 49 ticks on the day, with 10-year cash German yields falling as low as 0.918 percent, within touching distance of their record lows. Bond yields fell sharply across the euro zone and money market rates also pushed lower.

Short-dated bond yields in Germany, Belgium, the Netherlands, Finland, France and Austria fell further into negative territory. Yields on bonds of up to four year maturities in Germany turned negative as well.

The euro fell to a 14-month low against the dollar of $1.3036 on trading platform EBS.

“It’s a surprise. Euro/dollar is getting slammed,” said Darren Courtney-Cook, head of trading at Central Markets Investment Management. (Reporting by London markets team, Writing by Marius Zaharia; Editing by Emelia Sithole-Matarise)

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