* Euro back on defensive in wake of ECB’s launch of QE
* Downtrend in euro seen likely to persist in coming months
* Euro hits fresh 11-year low vs dlr, 7-year low vs sterling (Updates prices)
By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY, Jan 23 (Reuters) - The euro set a fresh 11-year low versus the dollar on Friday, staying under pressure after the European Central Bank launched a landmark bond-buying programme to support the sagging euro zone economy.
The euro touched a low of around $1.1315 on trading platform EBS, its lowest level since September 2003. The euro last traded at $1.1343, down 0.2 percent on the day.
The euro slid after the ECB said on Thursday that it would purchase sovereign debt from this March until the end of September 2016, by which time more than 1 trillion euros would have been created under quantitative easing.
The ECB seemed to leave open the possibility that the asset buying could last even longer, a factor that traders said could keep pressure on the euro.
“The open-ended structure is the important thing in my opinion. Even though it’s intended to last until September 2016, it’s not an actual line in the sand,” said Jesper Bargmann, head of trading for Nordea Bank in Singapore.
ECB President Mario Draghi said on Thursday that the asset purchases “will in any case be conducted until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below but close to 2 percent over the medium term.”
The euro was on track to end lower for a sixth straight week. It has dropped roughly 9 percent in the past six weeks, its worst performance since mid-2010.
Given such a big move over a relatively short time, the euro could be in for a period of consolidation, traders said. But they said the euro was likely to head lower in coming months.
“We will probably see a market where the euro weakens over the longer term, even if we don’t see the type of rapid fall seen in the past month or two,” said Kazuyuki Takami, head of trading department for the Bank of Tokyo-Mitsubishi UFJ in Singapore.
“I don’t know if it will be say, $1.03 or $1.05, but it wouldn’t be strange to see such levels some time this year,” Takami said.
The euro also set a fresh seven-year low versus sterling on Friday, falling to as low as 75.52 pence, its lowest level since early 2008.
The euro is set for another trial as global markets await snap Greek elections on Jan. 25. A win by the leftist Syriza party, which has pulled ahead on opinion polls, could trigger a standoff with the EU/IMF lenders.
The greenback benefitted from the euro’s weakness and hit an 11-year high against a basket of major currencies. The dollar index rose to as high as 94.498 on Friday, its highest level since September 2003.
Against the yen, the dollar eased 0.2 percent to about 118.33 yen.
The Australian dollar extended its recent losses, falling to as low as $0.7965, its weakest since July 2009. The Aussie dollar was last down 0.4 percent on the day at $0.7992.
The Australian dollar has been under pressure after a shock rate cut by the Bank of Canada earlier this week fuelled speculation the Reserve Bank of Australia could also ease soon. (Editing by Kim Coghill and Jacqueline Wong)