Investing.com - The euro pared gains against the U.S. dollar in thin trade on Wednesday, after greater-than-expected demand at a refinancing operation mounted by the European Central Bank failed to alleviate concerns over the financial crisis in the region.
EUR/USD pulled back from 1.3197, the day’s high, to hit 1.3086 during European early afternoon trade, up just 0.03% on the day.
The pair was likely to find support at 1.2992, Tuesday’s low and resistance at 1.3236, the high of December 13.
The ECB allotted EUR489.19 billion in unlimited three-year loans to 523 European banks in an attempt to avert a liquidity crunch in the euro zone.
It is hoped that the funds may also be used by lenders to purchase the sovereign debt of indebted euro zone states, easing pressure on borrowing costs.
The amount allotted was the largest ever for a longer-term refinancing operation by the ECB and indicated that lenders believe funding problems are likely to persist into 2012.
The euro had posted strong gains against the dollar on Tuesday after an auction of Spanish government debt saw the country’s short-term borrowing costs fall sharply.
An unexpected improvement in German business sentiment and stronger-than-expected U.S. housing data also buoyed markets.
The euro slumped to an 11-month low against the pound, with EUR/GBP slipping 0.16% to hit 0.8337.
Later Wednesday, the U.S. was to produce industry data on existing home sales.
EUR/USD pulled back from 1.3197, the day’s high, to hit 1.3086 during European early afternoon trade, up just 0.03% on the day.
The pair was likely to find support at 1.2992, Tuesday’s low and resistance at 1.3236, the high of December 13.
The ECB allotted EUR489.19 billion in unlimited three-year loans to 523 European banks in an attempt to avert a liquidity crunch in the euro zone.
It is hoped that the funds may also be used by lenders to purchase the sovereign debt of indebted euro zone states, easing pressure on borrowing costs.
The amount allotted was the largest ever for a longer-term refinancing operation by the ECB and indicated that lenders believe funding problems are likely to persist into 2012.
The euro had posted strong gains against the dollar on Tuesday after an auction of Spanish government debt saw the country’s short-term borrowing costs fall sharply.
An unexpected improvement in German business sentiment and stronger-than-expected U.S. housing data also buoyed markets.
The euro slumped to an 11-month low against the pound, with EUR/GBP slipping 0.16% to hit 0.8337.
Later Wednesday, the U.S. was to produce industry data on existing home sales.