* ECB extends bond purchase program to December
    * Slowing growth, Italy, trade likely behind ECB's policy
    * Fed seen raising rates twice more in 2018 -Reuters poll

 (Recasts lead, updates market action, adds quote)
    By Richard Leong
    NEW YORK, June 14 (Reuters) - The euro on Thursday suffered
its worst day against the dollar since the UK's Brexit vote
nearly two years ago after the European Central Bank
unexpectedly indicated that it planned to keep interest rates at
record lows into the summer of 2019. 
    The ECB's rate decision, together with prolonging its
massive bond purchase program currently worth 2.55 trillion euro
through the end of this year, likely stemmed from signs of
slowing growth in the euro zone, political turmoil in Italy and
global trade tensions, analysts said.
    "We didn't discuss when to raise rates," ECB President Mario
Draghi said at a news conference following the central bank's
policy meeting.
    That stance contrasts with the steady rate hike campaign
that the U.S. Federal Reserve signaled on Wednesday as it
dropped its pledge to keep rates low "for some time."

    The ECB's willingness to preserve its easy-money policy as
part of an effort to boost the euro zone economy soured bullish
bets on the single currency and caused traders to pile into the
dollar and yen. 
    "The market was caught wrong-footed as the rates would be on
 hold into mid-2019," said Peter Ng, senior currency trader at
Silicon Valley Bank in Santa Clara, California. 
    The euro hit two-week lows versus the dollar and
briefly traded below $1.16. It was last at $1.1602 for a loss of
1.58 percent, which was the biggest loss since the 2.37 percent
drop on June 24, 2016, the day after British citizens voted to
leave the European Union.
    Against the Japanese yen, the single currency slid 1.3
percent to 128.36 yen for its biggest one-day fall in
more than two weeks.
    Investors now price only a 30 percent chance of an ECB rate
hike of 10 basis points by July 2019, compared with a roughly 80
percent chance earlier in the day. 
    The U.S. central bank, which on Wednesday raised rates for
the second time this year, is expected to raise short-term
interest rates two more times in 2018 and likely to lift them
three times in 2019, according to a Reuters poll.
    The Fed, as expected, raised rates by a quarter of a
percentage point to a range of between 1.75 and 2.00 percent on
Wednesday, citing a solid U.S. economy and labor market.
    "You have a widening rate differential between the U.S. and
Europe, and the dollar is the beneficiary," said Ed Egilinsky,
head of alternative investments at Direxion in New York. 
    As the Fed and ECB provided much of the week's central bank
fireworks, the Bank of Japan began a two-day policy meeting with
virtually no one forecasting changes to its stimulative policy
given recent signs of slowing growth.
    "I don't expect anything out of the BOJ," said John Sidawi,
who manages Federated Investors' Global Total Return Bond Fund
in Pittsburgh.
    Currency bid prices at 2:54PM (1854 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1602        $1.1789     -1.59%         -3.28%      +1.1851     +1.1590
 Dollar/Yen       JPY=        110.6000       110.3200    +0.25%         -1.84%      +110.6900   +109.9200
 Euro/Yen         EURJPY=     128.31         130.09      -1.37%         -5.08%      +130.3400   +128.2700
 Dollar/Swiss     CHF=        0.9961         0.9855      +1.08%         +2.24%      +0.9972     +0.9826
 Sterling/Dollar  GBP=        1.3286         1.3374      -0.66%         -1.67%      +1.3446     +1.3271
 Dollar/Canadian  CAD=        1.3086         1.2984      +0.79%         +4.05%      +1.3109     +1.2950
 Australian/Doll  AUD=        0.7489         0.7576      -1.15%         -4.00%      +0.7582     +0.7485
 Euro/Swiss       EURCHF=     1.1559         1.1617      -0.50%         -1.11%      +1.1648     +1.1558
 Euro/Sterling    EURGBP=     0.8731         0.8814      -0.94%         -1.71%      +0.8821     +0.8724
 NZ Dollar/Dolar  NZD=        0.6981         0.7023      -0.60%         -1.48%      +0.7044     +0.6974
 Dollar/Norway    NOK=        8.1126         8.0077      +1.31%         -1.15%      +8.1279     +7.9790
 Euro/Norway      EURNOK=     9.4139         9.4446      -0.33%         -4.41%      +9.4691     +9.3993
 Dollar/Sweden    SEK=        8.7200         8.6060      -0.29%         +6.32%      +8.7278     +8.5800
 Euro/Sweden      EURSEK=     10.1189        10.1479     -0.29%         +2.84%      +10.1925    +10.0989
 (Reporting by Richard Leong
Additional reporting by Tommy Wilkes, Dhara Ranasinghe and
Saikat Chatterjee in London;
Editing by Paul Simao and Leslie Adler)

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