TOKYO: The euro slumped to a new 12-year low on Thursday, reeling from an unrelenting onslaught after the European Central Bank started its quantitative easing (QE) campaign, highlighting the monetary policy divergence between the euro zone and the U.S.
The 1 trillion euro bond-buying program the ECB launched on Monday by has dented the common currency’s appeal by driving yields of many euro zone bonds deeper into negative territory and others to all-time lows.
A 30-year German bond now offers a yield below that of a two-year U.S. Treasury note .
The euro fell as far as $1.0505 , the lowest since March 2003. A further slide would only heat up talk of parity with the dollar, a phenomenon last witnessed in 2002. The euro was last at $1.0511.
Furthermore, developments in Greece did the euro no favors, with Athens appearing to have made no headway in persuading euro zone partners to renegotiate terms of a 240 billion euro bailout.
