(MENAFN- AFP)The euro slid back under $1.18 on Thursday after the ECB held interest rates and kept the easy money spigot open despite hiking its growth forecast for the eurozone.
The single currency's drop came on a down day for most global equity markets, including the US, where reports of opposition to the long-anticipated tax cut plan prompted selling, ending the Dow's four-day streak of records.
"The market is nervous because of the disorganized political situation," said Phil Davis of PSW Investments.
Reports that US Senator Marco Rubio, a Florida Republican, could vote against the final tax cut package revived worries about its fate. The Senate approved its version of the measure by just two votes including Rubio's, leaving President Donald Trump's party little margin to lose support.
The European Central Bank, as expected, left its headline interest rates unchanged at historic lows, including the main refinancing rate pegged at zero. It also kept its huge support for the eurozone economy in place.
But it significantly raised its eurozone growth forecasts, expecting to see the economy expand 2.4 percent this year, 2.3 percent in 2018 and 1.9 percent in 2019.
However inflation is not expected to return to its optimal level of just under two percent, with the ECB saying it expects consumer prices to rise 1.7 percent in 2020.
The euro came "under pressure as the ECB Chief Mario Draghi left the option on the table for extra monetary easing," said market analyst David Madden at CMC Markets UK.
The weaker euro did not help eurozone stocks. Frankfurt's DAX 30 ended the day down 0.4 percent, while the CAC 40 shed 0.8 percent.
The Bank of England also kept its key interest rate at 0.5 percent, though it said it was keeping an eye on Britain's Brexit-fueled inflation.
"Although inflation in the United Kingdom has jumped to its highest level in almost six years, it seems that the growing uncertainty over Brexit is likely to encourage the central bank to adopt a wait-and-see approach moving forward," said Lukman Otunuga, an analyst at the FXTM currency trading firm.
London stocks fell 0.7 percent as investors looked past official data showing that retail sales rebounded 1.1 percent in November from October, buoyed by Black Friday price reductions.
In US stocks, Twenty-First Century Fox jumped 6.5 percent after announcing it reached a deal to sell most of its key film and television assets to Disney for $52.4 billion. Dow member Disney also gained, winning 2.7 percent.
Teva Pharmaceuticals Industries surged 10.1 percent after announcing it plans to cut 14,000 jobs globally in a massive restructuring amid lower prices for generic drugs and debt problems.
- Key figures around 2140 GMT -
New York - DOW: DOWN 0.3 percent at 24,508.66 (close)
New York - S & P 500: DOWN 0.4 percent at 2,652.01 (close)
New York - Nasdaq: DOWN 0.3 percent at 6,856.53 (close)
London - FTSE 100: DOWN 0.7 percent at 7,448.12 points (close)
Paris - CAC 40: DOWN 0.8 percent at 5,357.14 (close)
Frankfurt - DAX 30: DOWN 0.4 percent at 13,068.08 (close)
EURO STOXX 50: DOWN 0.5 percent at 3,562.27
Tokyo - Nikkei 225: DOWN 0.3 percent at 22,694.45 (close)
Hong Kong - Hang Seng: DOWN 0.2 percent at 29,166.38 (close)
Shanghai - Composite: DOWN 0.3 percent at 3,292.44 (close)
Euro/dollar: DOWN at $1.1781 from $1.1828 at 2200 GMT
Pound/dollar: UP at $1.3431 from $1.3415
Dollar/yen: DOWN at 112.37 yen from 112.56 yen
Oil - Brent North Sea: UP 87 cents at $63.31 per barrel
Oil - West Texas Intermediate: UP 44 cents at $57.04 per barrel
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