The euro wallowed at 11-year lows early on Friday after suffering a massive decline as the European Central Bank launched a stimulus program that would pump hundreds of billions in new money into a sagging euro zone economy.
The common currency tumbled to $1.1316 as the market took in news that the ECB would purchase sovereign debt from this March until the end of September 2016, by which time more than 1 trillion euros would have been created under quantitative easing.
“It will underpin market expectations that interest rates will remain very low for very long, and it will put further downward pressure on the euro, especially if the U.S. Federal Reserve starts raising rates this year, as we expect,” analysts at Barclays wrote in a note to clients.
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