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Euro gains on US dollar as ECB launches new bond buying

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The euro pushed higher against the US dollar on Wednesday, hitting its highest level in three weeks as the European Central Bank launched new stimulus operations.

[NEW YORK] The euro pushed higher against the US dollar on Wednesday, hitting its highest level in three weeks as the European Central Bank launched new stimulus operations.

The euro rose above the US$1.14 level during the day before slipping back to US$1.1393 at 2100 GMT.

The yen meanwhile picked up slight ground on both the dollar and euro, while the pound slipped back as worries rise about a possible pro-Brexit vote in two weeks that could rock markets.

The ECB stepped into uncharted territory on Wednesday when it began to buy bonds issued by companies, in a bid to also kickstart eurozone inflation.

ECB chief Mario Draghi hopes the scheme - set to be worth billions of euros every month - will deliver the financial medicine directly where it is needed, with Europe's major public corporations.

The dollar continued to face selling amid more signs of weakness in the economy. Fresh data on the jobs market - on vacancies and separations in April - backed up Friday's report of a slowdown in hiring in May.

The weaker data supports doubts that the Federal Reserve will resume hiking rates in the next few months.

"Leading the dollar's charge lower have been growing doubts in the Federal Reserve raising borrowing rates over the summer," said Joe Manimbo at Western Union Business Solutions.

AFP