Euro drops to 7-month low

The ECB could increase its 1.1 trillion euro ($1.2 trillion) program of bond purchases or lower its rate on money deposited at the ECB by banks farther into negative territory.

“Highly indebted foreign-currency borrowers may be vulnerable to a prospective normalization of financial conditions in the US and other advanced economies”, the European Central Bank said in its twice-yearly Financial Stability Review.

Prices of many commodities like copper and nickel continued to hover near multi-year lows as the dollar held steady in the wake of mostly positive US data released overnight. “It is clearly the wild card”, said Matthew Kaufler, portfolio manager at Federated Investors in Rochester, New York.

Both brokerages said they would cooperate fully with the investigations – which are part of a broader clampdown on how brokerages finance their clients’ stock purchases – adding that there would be no impact on their current operations. The Shanghai Composite index retreated 0.6 percent, heading for a 0.5 percent drop for the week.

The pan-European FTSEurofirst 300 index settled 0.9 per cent higher, adding to Wednesday’s 1.4 per cent gain, while the Euro STOXX 50 index added 1.1 per cent.

The yen was little changed against the dollar at 122.58 per dollar, showing no response to a series of Japanese economic data including the jobless rate, which unexpectedly fell to a two-decade low of 3.1%. The US dollar closed the day at 99.83 as traders closed positions ahead of the holiday and booked profits after the greenback soared close to 101.

During October, loans accorded rose 1.0 per cent from a year ago, compared with a growth of 0.6 per cent recorded in September, an European Central Bank spokesman said on Thursday. USA crude’s West Texas Intermediate (WTI) futures retreated 0.25 percent to $42.94 a barrel after rising to $43.30 during the Asian session.

A five-year bond due in November 2020 fetched an average yield of 0.37 percent, down from a previous record low of 0.53 percent posted at auction last month.

The ECB is considering whether it needs to expand monetary stimulus in the euro area even more to counter a stagnation in consumer prices. The probe into the finance industry comes as the government widens an anti-corruption campaign and seeks to assign blame for the selloff earlier this year.

The common currency skidded as far as $1.0565, reaching a low not seen since mid-April.

The South African rand slid 0.2 per cent and was down 2.5 per cent on the week in its biggest decline for the period in more than a month.

At midday, the benchmark Stoxx Europe 600, Germany’s DAX and France’s CAC 40 were all 0.2% higher. Bullion for immediate delivery was down 0.7 per cent at US$1,064.98 an ounce, according to Bloomberg generic pricing.