Euro Hits 11-Year Low Against Dollar

        The euro sank to its weakest level against the dollar in more than 11 years Tuesday, while bond yields in the eurozone hit fresh lows, as the effects of the European Central Bank's bond-buying program continued to reverberate around the region's markets.
        The euro fell over 1% to trade at $1.0746, one day after the ECB began buying government debt in an effort to drive up inflation and boost a fragile economy.
        The single currency had already fallen sharply this year as investors geared up for ECB quantitative easing, which was first announced in January. But the decline resumed on Tuesday as the onset of ECB buying pushed bond yields to new lows.
        Ten-year German yields fell to 0.28%, equaling their all-time trough. In Spain and Italy, 10-year yields hit their lowest on record at 1.17% and 1.24% respectively. Yields fall as prices rise.
        "QE is, at least in its early stage, dragging yields down across the board," said interest rate strategists at BNP Paribas.
        A renewed standoff between Greece and its creditors over the terms of any fresh bailout deal also pushed some investors into the safety of government bonds, they added.
        While the ECB embarks on its massive QE program, the U.S. Federal Reserve is edging closer to its first interest rate rise, boosting the dollar. That could mean the euro is in line for further losses against the buck, according to some analysts.
        "It appears likely that the divergences will widen further, encouraging a weaker euro and lowering the euro closer to parity [with the dollar] over the next six to 12 months," said Lee Hardman, a currency analyst at Bank of Tokyo-Mitsubishi UFJ.
        Stock markets were largely quiet Tuesday, with the Stoxx Europe 600 index little-changed in early trade. Germany's DAX index and France's CAC 40 index were both down 0.3%.
        In commodities markets, Brent crude oil was dow 0.7% at $58.14 a barrel, while gold was 0.9% lower at $1,156.60 an ounce.
        Write to Tommy Stubbington at tommy.stubbington@wsj.com
        Subscribe to WSJ: http://online.wsj.com?mod=djnwires
        (END) Dow Jones Newswires

        March 10, 2015 05:00 ET (09:00 GMT)

#FX
#Forex
#EuroLow
#AgainstDollar