ECB’s asset purchase plan exceeds expectations

The European Central Bank (ECB) gave markets a surprise when it’s long awaited quantitative easing plan was much larger than expected.

European shares rocketed on the news and the euro tumbled to an 11-year low.

ECB president, Mario Draghi, announced that the bank will buy 60 billion euros worth of bonds per month - starting in March and ending in September 2016. The total size of the scheme will exceed one trillion euros.

Traders had largely priced in the effects of a stimulus plan, however, the size of the scheme sent the single currency plummeting lower.

Versus the dollar, the euro touched its lowest level since September 2003 and looks likely to mark its sixth consecutive week of losses.

Against the pound, the euro tumbled to a new seven-year low and the currency approaches an 18-month low against the Japanese yen.

Shares in Europe climbed on the news and continue to march higher on a generally upbeat market sentiment, where risk appetite appears to have returned.

However, focus now turns toward the Greek general election on Sunday, January 23rd. Some volatility may return to markets if the anti-austerity party takes control of Europe’s most heavily indebted nation.