At 0930 GMT the FTSEuroFirst 300 index of leading shares was up 0.8 percent at 1,493 points (.FTEU3), Germany’s DAX was up 0.7 percent at 11,015 points and Britain’s FTSE 100 (.FTSE) was up 0.8 percent at 6,329 points.
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“We have inflation which is very low and we want to ensure price stability in both directions”, ECB Vice President Vitor Constancio said in an interview with Bloomberg TV.
The euro dropped 0.1 percent to $1.0610 as of 9:22 a.m. London time after sliding to $1.0566 on Wednesday, the lowest since April 14.
But as the dollar rallied, the Japanese currency weakened to 122.66 yen, down 0.1 percent on the day.
In the United States, investors largely squared their positions on Wednesday in preparation for Thanksgiving and will remain largely inactive on Friday, keeping volumes rather low and ranges tight going into the weekend.
The ECB has launched a raft of policy measures to get credit flowing, most significantly a massive programme to buy more than one trillion euros (S$1.5 trillion) worth of public sector bonds to pump liquidity into the system. “For the euro to be much weaker, there must be policy surprises, and I doubt Draghi will be successful in exceeding dovish market expectations”.
“The question now is how far can we go, and as the Fed tightens, euro/dollar parity is looking likely by the second quarter of next year”.
Asian shares advanced on Thursday, while the euro remained under pressure on the growing expectation that the European Central Bank (ECB) will roll out more stimulus soon even as the US Federal Reserve looks set to raise interest rates.
The ECB meets on December 3 and is widely expected to loosen policy via a further cut in the deposit rate or extending and expanding its bond-buying stimulus to stave off the threat of deflation.
The so-called deposit rate has been in negative territory as an incentive for banks to lend more.
Prices of many commodities like copper and nickel continued to hover near multi-year lows as the dollar held steady in the wake of mostly positive US data released overnight.
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“While stronger-than-expected confidence indicators could motivate some European Central Bank members to pitch the old Prince song “When doves cry” and argue against new European Central Bank action, Draghi’s determination at the October meeting combined with continued underlying economic weaknesses and the absence of any inflationary pressure should be decisive in launching QE2″, he said in a research note on Tuesday. It was also up 0.2 percent at 123.00 yen and 0.4 percent against the basket at 99.336.
