ECB Surprises with Rates Cut and Stimulus

The European Central Bank (ECB) surprised investors and markets on Thursday by cutting interest rates to record lows and announcing a bond-buying program.

From September 10, the rate on the main refinancing operations will be decreased by 10 basis points to a new low of 0.05 percent. The rate on the marginal lending facility will be decreased by 10 basis points to 0.30 percent and the rate on the deposit facility will be cut still further into negative territory, to -0.20 percent.

The euro fell by over 1 percent against the dollar to under $1.30 after the rate announcement, before paring some losses. European stocks traded sharply higher.

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