In a bout of intense volatility, the euro swung from a sharp gain to a steep decline Thursday after the European Central Bank said it would begin tapering its massive monthly bond-buying program in April.
The ECB’s decision surprised many market strategists and investors who had expected the central bank to extend its program of buying public and private eurozone debt at its present pace of €80 billion ($80.6 billion) for most of 2017. Instead, the central bank announced it would taper the program to €60 billion ($64 billion) beginning in April. The central bank also left interest rates unchanged, as expected.
Looking ahead, the Federal Reserve is widely expected to raise interest rates at the close of its two-day policy meeting on Wednesday. Fed-funds futures, used by investors to speculate on the direction and pace of rising interest rates, were pricing in a more than 97% probability of a hike next week.