But it failed to satisfy because it didn’t increase the pace of monthly purchases and because the cut in the deposit rate (of 10 basis points) was rather small. The ECB announced a slight cut in one of its key interest rates in an attempt to stimulate lending and help a modest economic recovery.
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It spun markets. The euro jumped more than 1 percent against the dollar, rebounding sharply from a 7-1/2-month low hit hours previously.
The European markets point to a lower open on Friday, as investors across the globe reacted negatively to the move from the European Central Bank on Thursday. The dollar index traded back above 98.300 early on this morning after a heavy sell-off yesterday which was largely driven by the knee-jerk rally in the euro.
Whitbread Plc fell 3.3 percent, for the biggest loss among travel-and-leisure companies, after Barclays Plc cut its recommendation on the owner of Premier Inn hotels to equal weight, similar to hold, citing the possibility of slower revenue growth.
Belgium’s central bank governor expressed strong confidence in the measures announced on Thursday and dismissed concerns about the market’s negative reaction.
In metals trading, gold rose $7.40, or 0.7 percent, to $1,061.20 an ounce, silver rose 7 cents to $14.08 an ounce, and copper rose 3 cents to $2.06 a pound.
Europe’s main stock markets sank further in Friday opening deals on lingering disappointment over “underwhelming” eurozone stimulus measures, dealers said.
Responding to reporters’ questions over possible future action and whether interest rates were now at their lower bound, Draghi said: “We are not going to be hampered in this by technical issues”.
FED ACTION: While the European Central Bank is easing policy, the U.S. Federal Reserve looks set to raise interest rates later this month for the first time in nine years.
Hence, a policy divergence between the ECB and the Fed emerges, with the European Central bank keeping up with the status quo and its American counterpart moving towards a tighter monetary policy amid an improving job market.
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However, in the commodity space, the United States Oil ETF (USO) rose 2.3% on December 3, as investors’ focus shifted towards the OPEC (Organization of the Petroleum Exporting Countries) meeting on December 4, 2015.
