LONDON: The euro tumbled to its lowest level in four months and European stocks rose on Thursday after the European Central Bank cut all of its key interest rates.
The euro fell 0.15 percent to $1.3558, its weakest level since February 6, after the ECB said it would take one of its rates into negative territory for the first time in the bid to fight deflation.
The move also supported European stocks.
The CAC 40 in Paris shot up from a gain of 0.38 percent before the decision to trade up 0.77 percent at 4,535.65 after the announcement.
London's FTSE 100 index of top companies switched from a loss to a gain of 0.05 percent at 6,822.07 points.
Frankfurt's DAX 30 picked up marginally to a gain of 0.28 percent to 9,954.06
The bank's decision-making governing council voted to lower the central refi refinancing rate to 0.15 percent, from 0.25 percent previously, and its interest rate on the marginal lending facility was trimmed to 0.40 percent from 0.75 percent.
The ECB's deposit rate, the rate at which the central bank pays commercial banks for depositing their unused cash, was reduced from zero percent to minus 0.10 percent.
"In an unprecedented step for any major central bank, (the ECB) now charges banks for depositing funds with the ECB, as we had expected," said Barclays in a research note.
HSBC economist Karen Ward pointed out that more moves were likely imminent at the press conference by bank head Mario Draghi.
"A big market reaction is only likely if Mr Draghi announces outright purchases of assets -- either private or public sector," she said in a note.
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