Date: Monday 25 Jun 2012
The euro recovered ground against the dollar on Friday, following Thursday's 1.3 per cent loss, as investors cheered the European Central Bank's decision to loosen lending rules.
The ECB said it would let financial institutions pledge a wider range of assets, such as lower quality collateral in exchange for cash. This gives banks a wider range of assets to participate in lending facilities.
The single currency rose to an intra-day high of $1.2583 before slipping back to
$1.2564 as investors digested data showing Germany’s Ifo index of business confidence slumped to a two-year low in June.
On Thursday, the euro suffered its worst sell-off since December 2010 as investors sought safe haven plays following a string of disappointing global data. The euro was down around 1.1% for the week. Against the yen, the euro rose 0.3% to ¥101.03 on Friday.
The dollar index, which measures the US currency against a basket of six currencies, fell to 82.267 from 82.352 on Thursday.
The greenback bought ¥80.46 from ¥80.28 the previous session and logged a weekly gain of 2.2%.
Sterling fell to $1.5575 versus $1.5596 the previous session but demand for riskier currencies remained subdued amid nerves about the downgrade of 15 major banks.
The pound still managed to recover from Thursday's sell-off amid Moody's ratings downgrade of banks such as Barclays, HSBC and RBS but registered a 0.9% decline for the week.
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