The euro strengthened today after the European Central Bank announced that it would lend the European banks less than was expected, fueling optimism for Europe’s fiscal system.
Previously the euro dropped on the worries that the banks would require more loans, signaling that the weak European banking system wouldn’t survive without support. The ECB said, though, that it’d loan 131.9 billion euro to the banks, that’s more than twice lower than expected 300 euro loan. The euro also gained versus the U.S. currency after the report showed that the U.S. employer added fewer jobs than was expected.
The smaller amount of loans indicates that Europe’s fiscal system stronger than was estimated. Ensuing optimism pushed the euro out of the bottom.
EUR/USD traded at 1.2284 as of 16:08 GMT after opening at 1.2187. EUR/JPY rose to about 108.73 from its opening rate of 107.99.
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