The European Central Bank announced a 750 billion asset-purchase programme on Wednesday evening in response to the coronavirus outbreak, sending the euro rising against the dollar and the pound.

Sterling teetered near the lowest since at least 1985 against the dollar. The Australian dollar was pinned near a 17-year low, while the New Zealand dollar fell to an 11-year low as price dislocations and low liquidity in other financial markets sparked an investor exodus into cash.

The ECB said the new programme, which targets public- and private-sector assets, will be conducted until the end of 2020.

The ECB’s announcement is the latest in a series of steps by major central banks this week to offset the impact the coronavirus outbreak is having on the global economy and financial markets.

Analysts say the euro’s gains could be short-lived because many investors are selling what they can to keep their money in dollars due to the unprecedented amount of uncertainty caused by the virus epidemic.

“The euro is being bought because the ECB, which had previously seen as somewhat reluctant to move, has come out with something very bold,” said Takuya Kanda, general manager of the research department at Gaitame.com Research Institute in Tokyo.

“However, unless the number of new virus cases starts to fall, no amount of central bank action may be enough. There is an extreme form of risk aversion right now which will support dollar buying in the end.“

The ECB’s purchase scheme, which was announced at an emergency meeting late on Wednesday, came less than a week after policymakers launched fresh stimulus measures.

The new asset-purchase programme will also include debt from Greece, which has so far been shut out of ECB bond purchases due to its low credit rating, the ECB said.

The pound was last quoted at $1.1643. Sterling tumbled to $1.1450 on Wednesday, the lowest since at least 1985, as the rush into dollars left no currency unscathed.

Global markets have experienced months of turmoil as the coronavirus, which emerged in central China late last year, has now spread to more than 100 countries and claimed more than 8,000 lives.

The heightened uncertainty around the previously unknown virus, which has triggered emergency lockdowns and injections of cash unseen since World War Two, is causing investors to abandon traditional trading strategies in favour of selling what they can to keep their money in dollars.

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