Euro hits fresh 11-year lows against dollar after ECB move

The euro fell to fresh 11-year lows against the dollar on Friday following the European Central Bank's announcement on Thursday that it would pump a trillion euros into the euro zone economy to revive sagging growth and ward off deflation. The euro lost over 2 percent against the greenback and fell below $1.12 to $1.1115 for the first time since September 2003 after the ECB unveiled a bond-buying program.
-- Greek election on Sunday adding to euro weakness
The euro also hit a 16-month trough against the yen at 130.91 yen on Friday. After a similar tumble on Thursday, the euro was down over 7 percent since the start of the year and was on track for its biggest monthly fall since the depths of the financial crisis in early 2009. The euro fell over 3 percent against the dollar this week. "What the ECB is trying to do is enough to drive the euro below parity by the end of this year," said Shaun Osborne, chief foreign exchange strategist at TD Securities in Toronto. He said the euro could hit 96 cents by the end of 2015.
The euro is set for another trial as global markets await snap Greek elections on Sunday. A win for the leftist Syriza party could trigger a standoff with Greece's EU/IMF lenders. Analysts said the uncertainty added to the euro's weakness. The euro also set a fresh seven-year low versus sterling of 74.295 pence. The dollar appeared to be headed higher given the Federal Reserve's path toward tighter monetary policy in contrast with the looser policies of other developed market central banks such as the ECB and the Bank of Japan, analysts said.
"The name of the game is that the dollar will continue to appreciate against currencies of central banks that are easing," said Mark McCormick, currency strategist at Credit Agricole in New York. The dollar index, which measures the greenback against a basket of six other major currencies, hit fresh more than 11-year highs and was last up 0.96 percent at 94.980. The dollar was last down 0.6 percent against the safe-haven yen at 117.78 yen, with analysts citing weakness in US stocks and lingering disappointment that the Bank of Japan held off from expanding its bond-buying program.