The ECB took a key interest rate further into negative territory in its first rate cut since 2016 and announced it would resume stimulus via asset purchases at the rate of 20 billion euros per month and cheap loans to banks.
While the quantitative easing (QE) stimulus amount may have been lower than what some analysts expected, the tone of ECB was more dovish.
"But the key point is that this commitment to more QE is open-ended: it will end shortly before the Bank begins raising interest rates," said Andrew Kenningham, chief European economist at Capital Economics.
Meanwhile, the ECB said it wouldn't raise interest rates until it saw inflation moving up towards its goal of just under 2.0 per cent over the medium term.
The euro fell more than a cent against the dollar in the moments following the ECB announcement, dropping below USD 1.10 and falling further as ECB chief Mario Draghi gave a news conference.
Eurozone stocks climbed, with Frankfurt's DAX 30 index and the CAC 40 percent both adding 0.8 per cent.
Equity markets also found some support amid signs of easing trade-war tensions between China and the United States.
US President Donald Trump on Wednesday said he would delay hiking tariffs on some Chinese goods, just hours after Beijing announced it would remove a range of American products from its own planned levies.
China added Thursday it was "making enquiries" about buying American farm products including big-ticket products like pork and soybeans.
The more conciliatory tone -- after months of rancour -- fuelled hopes that they could edge towards solving their long-running trade war, which has jolted the global economy and stock markets.
Elsewhere on Thursday, oil prices extended recent losses as traders bet on a possible return of Iranian crude to the market after the firing this week of Trump's hawkish national security adviser John Bolton eased fears of a conflagration in the Middle East.