The news that European banks planned to repay ECB crisis loans on an early schedule has been helping the euro in recent weeks. Therefore, when the report came that banks hadn’t repaid as much as some expected, the euro took a hit. The 17-nation currency is struggling today.
Euro touched a low not seen for six weeks today following the release of a report on European banks’ repayment of crisis loans. The European Central Bank offered special low-rate loans to banks struggling during the sovereign debt crisis in the eurozone. Over the last few weeks, news has been circulating that banks would be repaying the loans early. The news has been a great help to the euro, as well as being taken as a sign that the eurozone has weathered the worst of the crisis.
However, when the ECB made its report, the news was that 61 billion euros had been repaid. Many analysts had expected that number to be higher — $130 billion. Instead, banks have repaid less than half of what was expected. The result makes it clear that there are still plenty of banks in the eurozone that still need help, and that is weighing on the euro.
At 14:47 GMT EUR/USD is down to 1.3180 from the open at 1.3191. EUR/GBP is down to 0.8625 from the open at 0.8647. EUR/JPY is up to 123.0650 from the open at 122.8050.
If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.