Euro got 2-year low as ECB stay fire

The euro slumped to a near -12 months low on Thursday after the European Central Bank remained indistinct about whilst it’ll boost interest rates inside the face of hovering inflation.

The drop within the single foreign money helped raise European shares, at the same time as Wall Street equities resumed a downward slide amid worries over tightening US economic policy.

The ECB stood still in the face of record eurozone inflation, keeping its stimulus plans and rates unchanged, as the war in Ukraine cast a pall over the eurozone economy.

Meeting for the second time since the outbreak of the conflict, the bank’s 25-member governing council stuck to a plan that “should” see its bond-buying scheme come to an end in the third quarter.

An interest rate hike would follow “some time” after the stimulus program comes to an end, and any increases “will be gradual.”

The decision leaves the ECB further out of step with many of its peers. Central banks such as the Bank of England, US Federal Reserve and the Bank of Canada have already triggered their first interest rate rises in response to soaring inflation.

The euro took a knock after the ECB’s decision, slipping under $1.08 for the first time since May 2020, falling as low as $1.0758.

The ECB “continues to show little sign of looking to hike rates after leaving rates unchanged at their policy meeting today, while being even handed over the risks facing the eurozone economy,” said market analyst Michael Hewson at CMC Markets UK.

The ECB announcement provided a boost for eurozone stocks, however, which moved into positive territory and ended the day higher.

Wall Street meanwhile retreated, concluding a holiday-shortened week on a weak note, as the yield on the 10-year US Treasury note surged above 2.8 percent. Treasury yields are seen as a proxy for interest rates.

“Right now, we’re tied to this correlation between rising yields and falling tech shares,” said Art Hogan, strategist at National Securities.

All three major indices fell, with the Nasdaq leading the group by falling 2.1 percent.

Large banks were mixed following a deluge of earnings, with executives describing the US economy as in solid condition, but warning of uncertainty over the Ukraine invasion, inflation and shifting monetary policy.

Citigroup gained 1.6 percent, while Goldman Sachs dipped 0.1 percent and Wells Fargo tumbled 4.5 percent.

Elsewhere at the corporate the front, Tesla chief Elon Musk launched a adverse takeover bid for Twitter, providing to shop for one hundred percentage of its stock and take it non-public, according to a inventory alternate filing.

The circulate follows Musk’s criticism of the platform. Some analysts expressed skepticism about the bid, noting Musk’s history of outrageous and unpredictable behavior

Oil charges, in the meantime, driven higher following a New York Times report that European officers have been drafting a plan for an embargo on Russian crude products.