Euro up on talks of ECB bond buying
Published: 5 Sep at 6 PM
The euro rebounded from losses earlier in the day to jump dramatically following indications that the European Central Bank is set to announce a fresh government bond purchasing initiative to tackle the debt crisis in the eurozone.
The ECB is scheduled to have a policy meeting on Thursday at which more details of the programme will be announced by the bank’s president Mario Draghi. The central bank revealed last month that it would begin purchasing Italian and Spanish government bonds again so as to reduce the embattled states’ borrowing costs under the conditions that they requested aid from the bloc’s rescue fund and complied with strict conditions.
The single currency began to climb in the early New York trading after Bloomberg reported that the ECB president’s plan would include i=unlimited purchasing of government bonds. It was thought that the bank would be wary about revealing the scale of its bond buying because the Germany’s central bank’s opposition to the plan.
The euro last was seen at 0.3 per cent up at $1.2604, moving back in the direction of its two-month peak of $1.2636 hit on Friday. Traders and analysts said that volume was light and that could be exacerbating price swings.