Euro Exchange Rate Today: EUR softer vs USD and GBP; The ECB fails to address the 'large elephant in the room'

Last Updated on Friday, 10 February 2012 10:47 Written by Rob Samson Friday, 10 February 2012 10:45

Euro Rates Today: The euro dollar exchange rate is 0.24% lower on the day at 1.3255, the euro pound exchange rate is 0.28% lower at 0.8376. (For more live euro exchange rates scroll down to bottom of the page).

For the euro exchange rates, today is all about digesting yesterday's action out of Europe. Market sentiment this morning would suggest there is not much to be excited about.

---

Advertisement - Article Continues Below

---

Yesterday saw the ECB offered no change in policy, President Draghi’s conference revealed the ECB’s stance on several issues.

On the macro front, little has changed and the bank remains in data-watch mode.

"The large elephant in the room was of course the ECB’s stance on Greece and the majority of questions were directed to this. While Draghi initially refused to be drawn into discussions on the subject, he later revealed his thoughts on the legality of transferring ECB holdings to the EFSF. He stated that swapping the bonds with the EFSF for any loss would simply be debt monetisation but then noted that "if you consider the EFSF is governments, so if the ECB gives
money to governments that's monetary financing," says Geoffrey Yu in a morning exchange rate note at UBS.

If the ECB distributes part of its profits to its member countries as part of the key, capital key, that's not monetary financing."

"While this quote can be interpreted in many ways it at least leaves the door open for ECB involvement in the debt swap, provided it is done at cost or better," says Yu.

Following December’s announcement of widening collateral eligibility, the ECB published details on the new criteria, which have been established for the national central banks of 7 countries (France, Italy, Spain, Cyprus, Ireland, Portugal, Austria).

BoI Director General Saccomani said that the new rules with give Italian banks the chance to increase borrowing by up to EUR70 bn.

Any hopes of a major announcement from the Eurogroup faded on Thursday afternoon, Greek PM Papademos' office said talks with the troika ended 'successfully' but Dutch and German officials then hit the wires to downplay hopes of a final decision.

Finally German Finance Minister Schaeuble announced that there will be no deal announced at the Thursday meeting, since the current deal does not fulfil  conditions.

He added that it is still not clear whether the deal can successfully reduce the debt burden to 120% of GDP, which is what the troika requirements have previously stated.