Euro plunges to new 11-year low against dollar on ECB bond buyback plan

The euro plunged near an 11-year low against the dollar and to a fresh seven-year low against the sterling late on Thursday (26 February) after the European Central Bank launched a bond buying plan that would increase the total monthly fund injection to €60bn ($67.28bn, £43.56bn).

The ECB will commence the new phase of the quantitative easing next month itself and will continue until September 2016. Germany opposed the decision citing this kind of a plan will allow spendthrift countries to slacken economic reforms.

The ECB move further widened its divergence with the US Federal Reserve.

The EUR/USD fell to 1.1183 after the announcement, down 1.6% from the previous close, and getting closer to the 26 January 11-year low of 1.1097.

Against the pound, the common currency plunged to 0.7261, a seven-year low, and continuing downward on Friday (27 February), hit as low as 0.7258.

The slide in the euro was across the board. The EUR/JPY fell to a three-week low of 133.515 and the EUR/CHF dropped to a 10-day low of 1.0638, moving off a one-month high.