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Currency change report 29th February 2012: important LTRO funding results for euro banks today

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On the 21st of december 2011, the European central Bank lent euro-region banks a record 489 billion euros in its first longer-term refinancing operation (LTRO), which had a very strong positive impact on markets. The market is expecting that the ECB would lend another 470 billion euros for second LTRO. Using the operations, banks can borrow from the ECB at around 1% and avoid any liquidity problems that would have a problematic impact on euro-zone. . The ECB will give out three-year discounted loans results to banks this morning at 10h30 UK time.

The euro strengthened against the dollar anticipating  a positive European Central Bank allotment of three-year loans to banks. Italian bonds yields fall to their lowest level since last august a sign of confidence coming back in euro-zone.

Irish government decided to vote a referendum on the European Union’s new fiscal treaty. Irish voters rejected the last two European referendums, most recently in 2008. A rejection would worsen long-term funding for Ireland, which took a bailout in 2010, and cast doubt on its commitment to the euro.

Have a nice day

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