The euro strengthened, recovering most of Wednesday’s loss, as Greek banks will get emergency funding after the European Central Bank put restriction on loans to the nation’s financial system.
The currency gained versus most of its major peers as the ECB will allow the Greek central bank to provide as much as 59.5 billion euros ($68 billion) in emergency funding for the country’s lenders, a euro-area central-bank official familiar with the decision said Thursday. The decision comes after the ECB shut off a key avenue for Greek banks’ funding Wednesday, citing doubts that the country’s newly elected government will conclude its aid program.
“We got confirmation from the ECB to provide some temporary reprieve for Greek banks,” said Mark McCormick, a foreign-exchange strategist at Credit Agricole SA in New York. “It’s a bit of reversal from yesterday.”