FX round-up: Euro bounces back, but Moody´s may cut French debt rating reports say
Currency markets were generally in a reactionary mode on Thursday, with the euro/dollar recovering some of the previous day´s losses – on the heels of the latest Fed policy decision - and the Japanese yen cooling off after recent intense selling.
Euro/dollar ended the session 0.62% higher at 1.2849 and dollar/yen advancing by a slight 0.17% to 108.8
On Wednesday evening the US central bank shifted its interest rate forecasts higher, prompting some analysts to speculate that the Fed might move on rates before mid-2015. For the most part however markets seem to have feared a more hawkish stance.
Nevertheless, risk apettite was dampened by data showing that European lenders´ uptake of the European Central Bank´s (ECB) latest liquidity provision, via its new TLTRO, was quite a bit less than forecast. European banks only came in for €82.6bn, well below the roughly €150bn expected by analysts. That led many market observers to speculate that the central bank´s efforts to date to revive lending in the Eurozone will not suffice.
Of interest, French daily Lópinion reported that ratings agency Moody´s will downgrade the country´s long-term debt ratings. The country´s Prime Minister was forced to come out and say he had no knowledge of such an impending decision.
Sterling was stronger, as traders took comfort from bookies´ predictions for the result of Thursday´s referendum, even as traders in the Square Mile braced for what might have been a very long and difficult shift to say the least.
Cable ended the trading session higher by 1.1% to 1.6434.