The European Central Bank (ECB) announced an aggressive government bond-purchasing program today, worth about 60 billion euros per month, to prop up the sagging Eurozone economy. The program, which will be launched in March 2015, calls for the ECB to purchase up to 20% of the bonds while the central banks of the Eurozone countries will have to buy the rest.

ECB President Mario Draghi said that the bond purchasing would continue through September 2016, or until inflation rates in the Eurozone are close to 2%, meaning an open-ended program. Quantitative easing (QE) may help boost the economy in the short term. Nonetheless, the long-term effectiveness of such a program remains to be seen at this point.

One shouldn’t count on anything yet since a German lawyer is already preparing a legal complaint against the ECB bond-purchasing program. Other legal cases could mount, similar to that of the middle of the European debt crisis in 2012.

The euro-dollar exchange rate fell today to intraday low of 1.1363 dollar per euro and may begin to retest the 1.12 dollar per euro support level, or 61.8% Fibonacci retracement. The euro-Japanese yen exchange rate did not fare well either as the exchange rate tumbled 1.69% to 134.65 Japanese yen per euro, or the pre-Swiss francs crisis level.

The U.S. Dollar index (DXY pronounced “Dixie”) surged to 94.76, the highest reading since August 2003. The DXY next resistance will be at 96.27, or 50% Fibonacci retracement. Currency traders believe the DXY could retest the 100 level in the near future.

Gold prices surged to an intraday high of U.S. $1307.80 per ounce before pulling back and closed at U.S. $1302.20 per ounce. It is not surprising that gold is gaining momentum in the face of a stronger dollar, as hedge funds are shorting the euro and buying gold in U.S. dollars, known as the currency gold trade.

Crude oil, which is traded in an inverse correlation with the US dollar, meaning the crude oil prices decline with a strengthening US dollar, got hit again. Crude oil futures for delivery in March 15 [CLH15.NYM] on the New York Mercantile Exchange (NYMEX), took a nosedive to an intra-day low of U.S. $45.87 per barrel. We think that crude oil could stay at this level, or lower, until the ECB exits its stimulus program.

Japan and China are now facing off in an Asian currency war as the massive stimulus announced last year by the Bank of Japan forced China to devalue the renminbi. Today's ECB announcement of aggressive stimulus will make U.S. goods and services less competitive in the global market and could trigger another round of money printing by the Federal Reserve.

We think that the stock markets might be unprepared for the economic pain that the global currency wars will inflict.