In This Article:
(Corrects second bullet point to show euro makes biggest daily fall in 2 years, not hitting lowest level in 2 years)
* ECB vows to keep subzero rates until next year
* Euro makes biggest fall in 2 yrs; dollar index up sharply
* Wall Street creeps positive while Euro equities jump 1.25 pct
By Nick Brown
NEW YORK, June 14 (Reuters) - The U.S. dollar rose more than a penny against a basket of major currencies as the euro cratered, and U.S. stocks closed higher on Thursday, as the European Central Bank signaled interest rate hikes were a long way off.
The bank's unexpectedly dovish decision overshadowed its statement that it aimed to wrap up its crisis-era stimulus program at the end of this year.
The ECB now plans to reduce monthly asset purchases between October and December to 15 billion euros until the end of 2018 and then conclude the program.
Investors, though, seized on comments indicating that interest rates would stay at record lows at least through the summer of 2019, and some analysts believed it may be longer, with ECB President Mario Draghi's term due to expire at the end of October 2019.
The U.S. Federal Reserve on Wednesday decided to raise rates by a quarter of a percentage point, creating "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.
The euro marked its steepest one-day drop against the U.S. dollar since June 2016, and was down 1.75 percent at $1.1583.
The dollar index, which measures the greenback against six other top currencies, rose 1.17 percent.
Ten-year government bond yields in Germany, the euro zone benchmark, fell around 6 basis points to 0.422 percent compared with Wednesday's close.
Oil markets, pressured by the strengthening dollar and fears that OPEC countries could decide to increase output at a meeting next week, ended mixed.
West Texas Intermediate (WTI) crude oil futures settled at $66.89 per barrel, up 0.38 percent, while Brent went the other way, settling down more than 1 percent at $75.94.
"The independent show of WTI strength is merely a catchup process to the higher priced products and Brent values," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
EQUITIES STRONG
Benefiting from the euro zone dovishness: stock markets on both sides of the Atlantic.
Two of Wall Street's three main indexes closed in the black, with technology stocks leading the charge on the benchmark S&P 500. Helping boost stateside equities was a Commerce Department report showing retail sales rose 0.8 percent last month, the biggest advance since November 2017.