STOCK MARKET WATCH -- Friday, 25 January 2013

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30. Euro Jumps as Bank Loan Repayments Exceed Estimates; Yen Drops

http://www.bloomberg.com/news/2013-01-25/euro-extends-gain-versus-dollar-yen-after-ecb-ltro-announcement.html

The euro rose to its strongest level against the dollar in 11 months as the European Central Bank said banks will hand back a greater amount of three-year loans than analysts estimated, boosting short-term borrowing costs.

The 17-nation currency was set for a seventh week of gains versus the yen after the ECB said 278 banks will repay 137.2 billion euros ($184.4 billion) next week, exceeding the 84 billion-euro forecast in a Bloomberg survey of economists. The yen headed for a record run of weekly losses against the dollar as Japanese consumer prices fell. The Korean won slid as Samsung Electronics Co. said a stronger currency dented earnings.

“The repayment is much higher than the market expected and it’s positive for the euro,” said Roberto Mialich, a senior currency strategist at UniCredit SpA (UCG) in Milan. “Banks, which were part of the euro problem, are willing and able to make repayment to the ECB and this will provide further upward momentum.”

The euro gained 0.6 percent to $1.3458 at 9:24 a.m. in New York and touched $1.3470, the strongest level since Feb. 29. Against the yen, it appreciated 1.4 percent to 122.48 and reached 122.77, the highest since April 11, 2011.