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DAX, dollar gain

Simon BoneJanuary 23, 2015

Germany's main stock index, the DAX, has reached record highs in Frankfurt after the ECB announced a bond-buying program. It was helped along by the euro, which fell to new long-term lows on the news.

https://p.dw.com/p/1EPSX
Stock index chart (Photo: Frank Rumpenhorst/dpa)
Image: picture-alliance/dpa/Rumpenhorst

Germany's leading stock index, the DAX, has hit 10,500 for the first time before storming past 10,600 following an announcement the European Central Bank planned to spend at least a trillion euros on a eurozone bond-buying program.

The euro fell to another long-term low against the dollar on the news, plunging to $1,1253, its lowest level since September 2003, before stabilizing at over $1.13. Analysts fear the single currency could weaken further as the ECB's decision to begin quantitative easing marks a divergence with the policy of the US Federal Reserve, which has begun to wind up QE.

The weaker currency was good news for German exporters, making them more competitive on foreign markets. Among the big gainers in early trading in Frankfurt were Germany's automakers, with BMW up 5.1 percent.

Other European markets were up after the long-anticipated move proved to be more aggressive than observers had expected. The ECB said it would spend 60 billion euros ($70 billion) a month on bonds issued by indebted governments until at least September next year to encourage lending and fight deflationary pressures in the eurozone.

The move has been described as the last option remaining to the eurozone's monetary authority, as interest rates are already close to zero.

sgb/hg (AP, AFP)