European Central Bank cuts interest rates to 0% to boost economy

The European Central Bank (ECB) cut interest rates on Thursday to 0% from 0.05% in a bid to boost the Eurozone economy, surprising the financial markets by dropping its main refinancing rate.

The bank also expanded its quantitative easing asset-buying programme to 80 billion euros a month from 60 billion euros and cut its deposit rate to -0.4% from -0.3%, charging banks more to keep their money with the ECB.

After the rate cut, the euro was knocked down by 1% against the dollar. The move reflects the ECB's struggle with falling inflation expectations and worries about ultra low price growth.

Following the central bank's move, the shares of in the euro zone's top banks rallied on Thursday. Shares in Italian bank UniCredit surged 11%, while Societe Generale rose 6.6%. Deutsche Bank also climbed 6.7%.

US stock index futures also rose sharply on Thursday after the European Central Bank cut key interest rates.