Euro Struggles on LTRO

Euro is struggling today, especially against the US dollar. The Long-Term Refinancing Operation offered more money than expected, and that has many wondering about the stability of the European banking system. So, even though there is a measure of risk in the financial markets today, the euro isn’t feeling the good effects.

Indeed, the LTRO is offering $713.4 billion (489 billion euros) in special financing to banks in the latest — and possibly final — effort to help banks shore up their balance sheets. The fact that so much money has been allotted, though, is leading some to worry about the state of the European banking system. The result is a struggling euro.
Euro is lower against most major currencies today. Even with better GDP data coming out of Germany, and other positive news out of the United States, the euro hasn’t been able to join in on the gains experienced by other high beta currencies. The Troika has even expressed satisfaction with Portugal, easing fears about another debacle similar to Greece. Instead, euro is struggling as Forex traders wait to see what happens next.
At 15:41 GMT EUR/USD is lower at 1.3377, down from the open at 1.3458. EUR/GBP is down to 0.8395 from the open at 0.8464. EUR/JPY is down to 108.0340 from the open at 108.2825.

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