Investing.com - The euro fell against the other major currencies on Thursday after the European Central Bank launched a large scale quantitative easing program in an attempt to combat slowing growth and inflation in the euro area.
EUR/USD fell to session lows of 1.1518, not far from last Friday’s 11-year trough of 1.1459 and was last at 1.1526, down 0.72% for the day.
ECB President Mario Draghi said it will make monthly purchases of €60 billion per month, starting in March and continuing until late 2016.
The €1.2 trillion program will sizably increase the ECB’s balance sheet Draghi said. The move should also strengthen demand and support money and credit growth and help return inflation back to the bank’s 2% target.
Draghi acknowledged the action the ECB took last year was “insufficient” to ward off the threat of deflation in the region.
The annual rate of inflation in the euro area fell into negative territory last month, dropping 0.2%.
Draghi said the risks to the euro area recovery remain to the “downside” but added that today’s action should bolster the outlook. He noted that lower oil prices should help households and support a wider recovery.
“However the euro area recovery is likely to be dampened by continued high unemployment and high public debt” he added.
The euro was lower against the yen, with EUR/JPY down 0.78% to 135.73 from 136.74 ahead of the announcement.
In other trade, EUR/CHF was down 0.70% to 0.9908. The single currency plunged to lows of 0.7722 against the Swiss franc last Thursday after the Swiss National Bank abandoned its 1.20 per euro exchange rate cap in a shock move.
The SNB had imposed the cap in September 2011, in a bid to stave off deflation and prevent the continued appreciation of the safe-haven franc.