Global stocks sink after Fed hike signal, eyes turn to European Central Bank

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The euro has dropped sharply after the European Central Bank said it will end its bond-buying stimulus program after December.

LONDON, June 15 (Reuters) - World shares fell and were set to end the week in the red on Friday while the dollar hit a seven-month high, as investors braced for a list of Chinese goods targeted in a first round of announced trade tariffs by the United States.

Chinese stocks led the losses, with the benchmark Shanghai Composite index plumbing a 20-month low, as investors anxious about the economic damage from the trade tensions with the United State. The currency had shed 1.9 percent to the dollar, its biggest daily decline since Britain voted to quit the European Union in 2016.

Draghi, the President of Europe's central bank (the ones that print the money and control the interest rate, among other things), seems to feel Europe's on the up - so he's stopped pumping money into it.

ASIA'S DAY: Asian stocks finished mixed.

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The Pound Euro (GBP/EUR) exchange rate skyrocketed on Thursday, as the single currency was met by a heavy sell-off in the wake of the European Central Bank's (ECB) latest policy meeting.

On Friday, however, the outlook for the euro appeared somewhat brighter as banks adjusted their forecasts for interest rates to the ECB's guidance, removing some uncertainty from the market.

Draghi said there would be no prospect of an increase in the ECB's key lending rate - now 0.0% - until next summer at the earliest.

"It remains part of the toolbox", he said. U.S. President Donald Trump has chose to impose "pretty significant" tariffs and will announce a list targeting $50 billion of Chinese goods on Friday, and a second wave of products worth $100 billion has been cued up. It also said it plans to hold off on raising interest rates until at least the summer of 2019, which is longer than some investors expected.

A broader slowdown could make it harder for the ECB to cut support if lower growth eases pressure on inflation, a threat to the bank's credibility as it has missed its inflation target of nearly 2 percent for over five years.

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The Dow Jones Industrial Average fell 7.94 points, or 0.03 percent, to 25,193.26, the S&P 500 gained 7.6 points, or 0.27 percent, to 2,783.23 and the Nasdaq Composite added 62.69 points, or 0.81 percent, to 7,758.39.

While the Fed and the ECB provided much of the week's central bank fireworks, the Bank of Japan is expected to produce no surprises at the end of a two-day policy meeting today.

The effects were more measured in the US, where Wall Street indexes were creeping up, stabilized too by a US Commerce Department report showing retail sales rose 0.8 percent last month, the biggest advance since November 2017.

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Oil prices were down, facing pressure from evidence of rising US output and uncertainty over supply, before a meeting next week of the world's largest exporters.

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