Investing.com - The euro fell to fresh 11-and-a-half year lows against the dollar on Thursday after European Central Bank President Mario Draghi said its quantitative easing program will continue until September 2016, or beyond if necessary.
EUR/USD hit lows of 1.1008, the weakest level since September 2003 and was last at 1.1031, down 0.44% for the day.
Draghi confirmed that the ECB will begin purchasing euro zone government bonds on March 9 under its new quantitative easing program.
The combined asset purchases will amount to €60 billion per month and are expected to run until September 2016, or until the ECB sees that inflation is on a “sustained path” to its target of close to, but below, 2% in the medium term.
The euro weakened after Draghi indicated that the bond purchasing scheme could extend beyond September 2016 “if needed.”
Draghi said the announcement of easing has already helped the euro zone economy and added that it should improve the outlook for growth and reduce economic slack.
The recent fall in the oil price should also help the euro zone economy, Draghi said, by boosting household spending and cutting firms’ costs.
The ECB raised its growth forecast for this year to 1.5% from 1.0% previously, followed by faster growth in 2016 and 2017.
But its cut its inflation forecast for 2015, saying it now expects inflation to be flat, down from 0.7% previously. It then expects inflation to increase to 1.5% in 2016, up from 1.3% and 1.8% in 2017.
The euro fell to fresh seven year lows against the pound, with EUR/GBP down 0.39% to 0.7229 and was at one-and-a-half month lows against the yen, with EUR/JPY sliding 0.26% to 132.24.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies rallied to fresh 11-year highs, advancing 0.45% to 96.41.
In the U.S., data on Thursday showed that the number of Americans who filed for unemployment assistance rose by 7,000 to 320,000 from the previous week’s total of 313,000.
The U.S. was to release what would be a closely watched employment report on Friday, after recent economic reports supported expectations for higher interest rates.