A $1.3 trillion German spending deal and commentary from the European Central Bank has also prompted yields to surge in the U.S. and elsewhere.
The European Central Bank looks primed to cut its key interest rate next week, after French inflation fell, and price increases held steady in Germany, Italy and Spain.
The safe-haven yen and Swiss franc climbed in volatile trading on Thursday, while the dollar slumped against most currencies, as jittery investors turned increasingly risk-averse amid an extended sell-off on Wall Street triggered by an escalating trade war initiated by the United States.
The European Central Bank on Thursday cut interest rates by a quarter-point, responding to signs of deteriorating activity and weakening inflation despite bond-market turmoil over plans for a splurge of spending.
FX traders are facing a monumental recalibration as the ECB prepares for its next move. Germany’s seismic fiscal shift has fueled the euro’s rally, but the real test will come in April when the ECB must decide whether to continue cutting rates or adjust to Europe’s new spending reality.
European Central Bank policymakers see a growing chance of a pause in their easing cycle at their next meeting before rates come down again, once they have greater clarity about trade and fiscal policy,
FRANKFURT — The European Central Bank cut its key deposit rate by 25 basis points to 2.50 percent, but its boss, Christine Lagarde, said the Bank may pause cuts as growing uncertainty clouds the economic outlook.
The European Central Bank cut interest rates for the sixth time in nine months on Thursday, sticking to its easing plan in the face of economic upheaval from an unfolding trade war and new plans to boost Europe's military spending.
DAX Rises on ECB Rate Cut, Fiscal Stimulus Hopes Grow – The ECB cuts rates while Germany considers fiscal easing. Will stimulus and trade shifts sustain DAX’s record-breaking run?
The ECB has cut rates five times since June as inflation retreated and economic growth faltered. But with rates slowly approaching a level that no longer restricts economic growth, one might expect an end to the easing cycle.
As expected, the European Central Bank (ECB) cut its policy rates today for the sixth time in this cycle, marking its fifth straight cut.