The euro is tanking after the European Central Bank announced a quantitative easing program and now US stocks are ripping higher.
On Thursday, the ECB said it would buy €60 billion of bonds each month through at least the end of 2016, and this news sent the euro sharply lower, falling to an 11-year low below 1.14 against the US dollar.
US stocks were higher following the news, and near 3:00 pm ET have ripped higher to highs of the day, with the Dow up about 270 points, the S&P 500 up 39 points, and the Nasdaq up 73 points.
All of the major stock averages are up better than 1.4%, and with Thursday’s gains, the S&P 500 has turned positive for the year.
Stocks in Europe were also higher, with the CAC in Paris up 1.3%, the FTSE in London up 0.8%, and the DAX in Germany up 0.9%. Stocks in Italy and Spain were up more than 1.5% following the ECB’s announcement.
The ECB’s program is not as straightforward as QE undertaken in the US and contains some conditions on how much debt from each eurozone member the ECB can buy, with the ECB not buying more than 25% of new debt issued by any country and not more than 33% of that country’s outstanding debt.