The euro exchange rate has risen against the dollar today (September 15th) following the announcement by the European Central Bank (ECB) that it would lend dollars to euro-area banks.
At 09:48 local time in New York, the euro surged to session highs against the greenback at $1.3871, which was up nearly one per cent.
The ECB's announcement came in an attempt to dampen liquidity concern about the European sovereign debt crisis.
Dan Dorrow, head of FX research at Faros Trading in Stamford, Connecticut, told Reuters: "This provision of dollar liquidity to European banks confirms our view that policymakers are not asleep and have learned lessons from the post-Lehman credit tightening that caused unwanted bank de-leveraging."
Meanwhile, director on the corporate currency sales desk at Societe Generale SA in New York Carl Forcheski echoed his words in an interview with Bloomberg.
He stated: "It's an attempt by the central banks to make sure there's enough liquidity so the markets don't freeze."
The ECB's move was coordinated to be inline with the Bank of England, Swiss National Bank, US Federal Reserve and the Bank of Japan.
Gains by the euro were also noted yesterday, as it rose by 0.6 per cent on the greenback, following comments by French President Nicolas Sarkozy and German Chancellor Angela Merkel stating their support for Greece.
Meanwhile, the dollar surged against the yen and hit session highs to trade at 76.80.
Elsewhere, Reuters reported yesterday that sterling fell to eight-month lows versus the dollar due to concerns over the impact the euro zone's debt crisis will have on UK growth and British banks.
The pound fell to $1.571 in early European dealing, which was noted as its lowest rate since mid-January.
