The STOXX Europe 600 Index added 1.4%, while the euro fell 0.7% versus the greenback to $1.06 – right near its lowest in almost a decade.
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Canada’s main stock index rose 0.25 per cent, led by gains for its heavyweight financial sector and some of its biggest miners.
Market participants expected trading would remain subdued for the rest of the session, with an early post-Thanksgiving close for USA markets on Friday extending the holiday lull.
The Dow Jones industrial average rose 5.95 points, or 0.03 percent, to 17,818.14, the S&P 500 gained 0.27 points, or 0.01 percent, to 2,089.41 and the Nasdaq Composite added 11.17 points, or 0.22 percent, to 5,113.98.
“If there’s anyone who has the market’s firm belief that they can over-deliver, it’s always going to be Mario Draghi”, Chris Weston, chief market strategist in Melbourne at IG, said of the European Central Bank president.
That fuelled talk that the central bank is getting ready for aggressive measures to lift inflation and economic growth in the 19-member euro zone.
The euro skidded as far as $1.0565 EUR= , reaching a low not seen since mid-April. The single currency slipped 0.3 per cent to ¥130.05.
European stocks rallied and Wall Street was little changed, leaving an MSCI measure of equities globally up 0.2 per cent. Data showed a decline in United States jobless insurance applications, while business investment is poised to rise.
“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”.
After several days spent sliding against major currencies following a turbulent few weeks, the Euro is finally on the uptick as the Markit PMIs for Germany and the Eurozone print positively. The bank could also potentially cut interest rates further.
Still, banks continue to park around 160 billion euros in overnight deposits with the ECB, indicating that even negative rates and extraordinary monetary stimulus has not unblocked the lending channel.
Commodity currencies were resilient this week, thanks in part to higher oil prices and as investors turned less bearish on some base metals.
U.S. Treasury debt prices were supported by record low yields for German government bonds and data that underscored the view of muted domestic inflation.
USA crude futures CLc1 fell 1.1 percent to $42.57 a barrel as traders also unwound some of buying they had made after Turkey had shot down a Russian warplane earlier this week.
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Overnight bank-to-bank Eonia lending rates dated for the ECB’s December 3 meeting fell below minus 0.28 percent, reflecting expectations the bank could cut the deposit rate as low as minus 0.35 percent, from the current minus 0.20 percent.
