The combination of the successful LTRO program which added over EUR 1 trln in liquidity to the European banking system and the long-awaited completion of the Greek bond swap (CDS auction settles shortly…) has helped lift the European banks from the doldrums, ending the existential threat to the system, at least temporarily.
Prices are at their highest levels since August of last year when risk aversion spiked on the US downgrade by S&P.
Continued strength in bank shares will be taken as a sign of European stability, a plus for EUR/USD.
EUR/USD continues to find sellers on rallies, with an Asian central bank a noted offer in the 1.3190/1.3210 area, traders report. Stops are mixed in above 1.3200, we hear.
