Euro tumbles as European Central Bank vows to keep rate down


Sterling steadied above its lowest level since November, after strong USA retail sales and a more hawkish Federal Reserve earlier this week boosted the dollar and underlined policy divergence between the countries.

Global stocks slipped back in the morning after the Fed warned that the "punch bowl" will be pulled away from investors at an even quicker pace than anticipated.

The bank's move toward the exit comes a day after the U.S. Federal Reserve decide to make its second interest rate increase this year and indicated more were coming.

The euro was 0.35 percent higher at $1.1608.

The Asia Pacific MSCI index edged down 0.2 percent, with most regional markets shrugging off a strong close on Wall Street.

"With the statement that key interest rates will remain at historically low levels until the summer of 2019, the European Central Bank has removed any fantasy of an earlier rate hike".

"I think it´s more just, we are just looking at the economy and what does it need and how do we sustain the expansion, keep the labor market strong and try to keep inflation near 2 percent".

Following a closely-watched meeting on Thursday, the European Central Bank said it will end its massive bond purchase scheme by the end of this year, taking its biggest step yet towards dismantling crisis-era stimulus.

The Euro initially weakened after the central bank said it would extend the bond purchase program, but spiked lower shortly after the start of ECB President Mario Draghi's press conference.

Beijing said it's ready to respond.

US Retail Sales and Unemployment Claims - Expectations - Retail sales are expected to rise 0.4% in May, following a 0.2% increase in April and a 0.7% gain in March.

"Markets have taken the new tariffs in their stride so far, with the Federal Reserve's interest rate hike and the ECB's phasing out of quantitative easing both creating greater market interest".

The Dow Jones Industrial Average fell 25.89 points, or 0.1 percent, to 25,175.31, but the S&P gained 6.86 points, or 0.25 percent, to 2,782.49 and the Nasdaq Composite added 65.34 points, or 0.85 percent, to 7,761.04.

In a rare merging of the sports and trading worlds, markets are gearing up for soccer's World Cup in Russian Federation, where time zone differences mean more matches during European, US and Latin American trading hours than any previous tournament.

Shares of Royal Caribbean Cruises jumped 5.1 per cent after the company bought a 66.7 per cent stake in privately-held Silversea Cruises for about $1 billion.

Investors were kept in check amid concerns about U.S. threats to impose tariffs of billions of dollars on Chinese goods.

The euro lost more than a cent against the dollar after the news, with dealers contrasting the decision to leave rates unchanged in the eurozone for at least a year, with signs from the Federal Reserve that it planned two further increases in USA rates in 2018 and three more in 2019.

Volume on USA exchanges was 6.75 billion shares, compared with the 6.70 billion average for the full session over the last 20 trading days.