(menafn – ecpulse)
The euro unexpectedly fell from three-month high versus the greenback after the ECB provided higher-than expected cheap loans to European financial institutions.
The ECB allotted 800 European banks with 529.5 billion euros for 1,092 days in a second round of its Long-Term Refinancing Operation (LTRO) compared with 489 billion euros in the first round launched in December, beating forecasts of 470 billion euros.
The second wave of cheap loans is predicted to boost demand for the region’s assets, where banks invest in high-yielding assets. However, the euro fell against majors after the announcement.
Despite the success of the first round of stimulus, there are no signs that there could be a third tranche. “If number one was a success and number two was a success, that doesn’t mean there has to be number three,” ECB council member Ewald Nowotny said on Feb. 27.
Meanwhile, the EUR/USD pair is trading around 1.3432 after it touched a high of 1.3485, while the day's high was recorded at 1.3422.
The trading range for today is among key support at 1.3250 and key resistance at 1.3700.
The U.S. dollar, on the other hand, rebounded slightly against a basket of major currencies as it rose to 78.30 after touching a low of 78.08, according to the six-currency gauge the dollar index.
Against the yen, the greenback pared its earlier advance to trade around 80.50, where the day's high was seen at 80.69 while the low was touched at 80.23.
The trading range for today is among key support at 78.60 and key resistance now at 81.65.
Later in the day, eyes will be on U.S. annualized GDP for the fourth quarter (second reading).
Moving to the British pound, it rose sharply to three-month high versus the greenback after the better-than-expected Mortgage approvals and consumer confidence data.
U.K. Mortgage Approvals for the month of January soared to 58.7 from a revised of 55.0, which was 52.9 initially, while analysts referred to a decline to 54.0.
Meanwhile, the GBP/USD is trading around 1.5940 after touching a high of 1.5957 and a low of 1.5895, where the breach of SMA 200 around 1.5820 levels paved the way for further advance.
The trading range for today is among key support at 1.5730 and key resistance at 1.6165.