ECB Loan Auction injects 442.24 billion into EURO banks
Today the ECB lent a record 442.24 billion Euros to banks at 1% for 1 year. The move is the ECB attempt to help ease credit conditions in European banks. It is also hoped the injection will help increase lending and lower mortgage rates.
The action could be viewed as bullish or bearish for the EURUSD. From a bullish standpoint, it is a stimulus that should boost bank activity and in turn economic activity. From a bearish standpoint, the action should help keep rates low.
The ECB will offer a subsequent 1 year operation on September 29th. However, the rate could be different depending on market conditions. It is not assumed that the rate will be any lower.

The EURUSD has found buying interest against the 1.4019 area (38.2% retracement support). The close yesterday was 1.4078. This level has held the topside for most of the NY session today.




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