Share markets across Europe and the US fall after the European Central Bank does an about-face on potential rate rises, sending the euro plunging against major currencies and the Australian dollar down against the greenback.
Global markets have fallen after Europe's deepening economic slowdown prompted the European Central Bank to slash its growth and inflation forecasts and announce a new round of cheap loans for banks.
"Throughout this unfolding drama the ECB had been stoic; clearly aware of the 'pervasive uncertainties' that had sprung up from numerous external sources, but at the same time confident they would be temporary. "The combination of the two main policy changes has caught markets off guard and as such doesn't help broader market confidence against a backdrop of a succession of central banks recently treading a more dovish path," Mr Friend wrote.
However, the Australian dollar also dropped against a stronger greenback, to test resistance just above the 70 US cent level — it had traded as low as 70.05 by 7:45am .
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