The European Central Bank on Thursday reduced interest rates to a record low as it tries to prevent the eurozone economy from worsening. The euro fell to a one-month low against the dollar after the report, and was down more than 1% at last check.

ECB President Mario Draghi said in a press conference after the release that risks to the continent's economic outlook are still to the downside amid "a renewed increase in the tensions in several euro-area financial markets and their potential spillover to the euro area's real economy."

The ECB's main refinancing rate will be cut by 25 basis points to 0.75%. The interest rate on the marginal lending facility will be decreased by 25 basis points to 1.5%, and the interest rate on the deposit facility will be decreased by 25 basis points to 0%.

Meanwhile, the Bank of England, in an effort to boost the U.K.'s sagging economy, announced it is raising its asset purchase target to 375 billion pounds, while maintaining its benchmark interest rate at 0.5%, and implying that more stimulus measures are possible in the future.

While it's been widely expected that China would cut interest rates again, the timing of the latest reduction was a surprise to the markets. The country's central bank reduced its one-year deposit rate 0.25 percentage point and one-year lending rate 0.31 percentage point.

The People's Bank of China is allowing banks to lend 30% below the lending rate floor.

"Since rates are already practically on the floor in the West, any further decline does not seem to move the needle much in terms of additional stimulus," an INTL FCStone report said. "In China, where rates have much further room to fall, the authorities face different kinds of problems, the first being the realization that Chinese borrowing demand will not necessarily be driven by interest rates alone, as borrowers will attach more importance to how confident they feel about the economic outlook."

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