Euro up following ECB bond buying announcement

The euro climbed to a two-month high versus the dollar in US trading on Thursday after the European Central Bank announced a new bond-buying programme in order to curb the debt crisis in the eurozone.

Market players have been preparing for the announcement for some time and, after reports were leaked on Wednesday that the ECB may introduce an unlimited bond-buying programme, ECB President Mario Draghi’s news conference brought about few surprises.

However, Draghi was coy on how the ECB sets out to go about the plan and gave few details away. a factor which led to the euro initially losing ground on the greenback. The single currency later rebounded to surge forward as investors saw the ECB president back up his pledge in July to do everything in his power to save the euro.

The euro climbed to $1.2634, a rise of 0.3 per cent and up from a session low of $1.2559. Earlier on Thursday it went up to as high as $1.2650, its highest point since the beginning of July, after news broke of the ECB leaving interest rates at 0.75 per cent. Many market players had been prepared for the central bank to reduce the rates to support struggling growth in the euro bloc.