(Reuters) - Bets that European Central Bank chief Mario Draghi will open the door wider to U.S.-style money printing pinned the euro at a two-year low and lifted world shares on Thursday, as China and Japan also geared up for more stimulus.
New forecasts will spell out the euro zone's deepening economic malaise but Draghi is unlikely to announce any radical move to shore up growth and inflation, such as printing money to buy government bonds. The ECB could extend its current debt purchase schemes to encompass corporate bonds.
European stock markets edged up in early trading as investors awaited Draghi's 1330 GMT (9.30 a.m. EST) post-meeting news conference. Having slipped below $1.23 overnight for the first time since August 2012, the euro remained around that level.
"The European Central Bank undertaking quantitative easing is at the top of the markets' Christmas wish list," said J.P. Morgan Asset Management Global Market Strategist Vincent Juvyns.
Such a move remains strongly opposed by Germany, however, and ECB Vice-President Vitor Constancio said last week that the bank would be better able to gauge in the first quarter whether it needed to start buying sovereign bonds.
Expectations of more stimulus from other global central banks was also lifting markets. In Asia, Chinese stocks saw their biggest leap in over two years as traders wagered Beijing will continued cutting rates next year.
Signs that stimulus-happy Shinzo Abe's coalition was heading for victory in Japan's upcoming elections meanwhile pushed the Nikkei to a near 7-1/2 year high and left the yen tantalizingly close to 120 yen to the dollar.
"There's activity in anticipation of extremely promising conditions being born," said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center Co in Tokyo.
U.S. economic data supported positive sentiment. It is one of the few major economies with any real strength and private jobs and services sector figures released on Wednesday underscored that resilience.
Elsewhere, battered oil prices steadied at $70 a barrel after an overnight bounce and gold managed to keep above $1,200 an ounce even as the dollar neared a 5-1/2-year high. Gold is priced in dollars.
The oil bounce brought temporary relief to Russia's battered ruble but it resumed its slide after Vladimir Putin blamed the West for "pure cynicism" over Ukraine, giving little sign that the two sides will resolve their dispute.