LONDON: The euro sank Thursday against the dollar after the European Central Bank launched its eagerly-awaited quantitative easing economic stimulus to boost growth and fight deflation.
The single currency slid to $1.1483 in mid-afternoon London deals after the ECB announcement, compared with $1.1620 beforehand.
The ECB, led by chief Mario Draghi, revealed that it will launch a programme to buy 60 billion euros ($69 billion) of private and public bonds per month, starting in March.
The programme of sovereign bond purchases comes after eurozone inflation turned negative in December, stoking fears that the 19-nation eurozone is on the brink of a dangerous deflationary spiral of falling prices.
"Mario Draghi has been left with little choice than to begin a more robust than expected quantitative easing (QE) programme in a bid to awake the economies of the eurozone from their slumber,2 said Dennis de Jong, boss of trading site UFX.com.
"This play is seen by many as the last roll of the dice for the beleaguered euro. QE has had some success in the US and UK, but with such a patchwork of economies and banking systems in the eurozone, the jury is very much out.
"There will be a lot of people holding their breath over the coming months."
Prior to the announcement, media speculation had been building that the ECB would unveil proposals to buy 50 billion euros of bonds per month until the end of 2016.
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