Euro jumps, stocks rise as ECB keeps stimulus in place

Europe's main stock markets climbed and the euro jumped against the dollar Thursday after the ECB said it is keeping its vast armory of economic stimulus measures in place, but would revisit them in October. 

As European Central Bank chief Mario Draghi voiced concern over the single currency's strength, which is putting the brakes on inflation at a time when policymakers are looking to wind down stimulus measures, the euro jumped above $1.20.

"The recent volatility in the exchange rate represents a source of uncertainty which requires monitoring," Draghi said as the ECB its left interest rates at all-time lows and said it would stick to its mass bond-buying programme. 

Draghi said the ECB would decide next month about its next stimulus moves.

"This autumn we will decide on the calibration of our policy instruments beyond the end of the year," he said. 

"Unless a risk that is not seen today materialises, we should be ready to take the bulk of these decisions in October." 

On the other side of the Atlantic, prices on Wall Street were treading water as market watchers eyed a second major US hurricane, Irma, considered possibly the largest in history, that was expected to pummel Florida and neighboring states. 

Earlier in Asia, stock markets had struggled to hold on to initial gains with the North Korea crisis continuing to play on investor confidence despite US President Donald Trump's deal to raise the US debt ceiling.

Markets rallied at the start of the day as the surprise deal between the president and Democrats to lift the US borrowing limit provided some much-needed good news at the end of a turbulent week.

The news raised hopes again for the president's market-friendly economic agenda, including tax reform and infrastructure spending, which have been sidetracked in recent months.

While tensions over Pyongyang's weekend nuclear test have abated there are fears the North is planning to launch another missile this weekend, riling an already furious Unites States.

Trump's insistence to Chinese counterpart Xi Jinping that military action was not his "first choice" and a call for a diplomatic solution provided some solace but fresh provocation could rattle markets again.

On currency markets the dollar lost some of Wednesday's gains against the haven yen, while traders took stock of the surprise resignation of Federal Reserve number two Stanley Fischer, who is considered one of the bank's less dovish members.

Analysts said the announcement could clear the way for boss Janet Yellen's departure when her term ends next year and allow Trump to determine the focus of the Fed by selecting officials perhaps less likely to raise interest rates or favour stringent bank regulations.

- Key figures around 1540 GMT - 

New York - DOW: DOWN 0.2 percent at 21,770.66 points

London - FTSE 100: UP 0.6 percent at 7,396.98 (close)

Frankfurt - DAX 30: UP 0.7 percent at 12,296.63 (close)

Paris - CAC 40: UP 0.3 percent at 5,114.62 (close)

EURO STOXX 50: UP 0.4 percent at 3,447.66 (close)

Tokyo - Nikkei 225: UP 0.2 percent at 19,396.52 (close)

Seoul - Kospi: UP 1.1 percent at 2,346.19 (close)

Hong Kong - Hang Seng: DOWN 0.3 percent at 27522.92 (close)

Shanghai - Composite: DOWN 0.6 percent at 3,365.50 (close)

Euro/dollar: UP at $1.2029 from $1.1982

Pound/dollar: UP at $1.3094 from $1.3076 

Dollar/yen: DOWN at 108.21 yen from 108.87 yen

Oil - Brent North Sea: DOWN five cents at $54.15 per barrel

Oil - West Texas Intermediate: DOWN 21 cents at $48.95