ECB`s Decision Spurs the EUR for a Jump

Yesterday the ECB announced it would lend banks 75.2 billion euros for a year term at the current interest rate of 1%. The number appeared to be lower, than it was anticipated by the experts. The EUR/USD currency pair achieved the level of 1.4634 from 1.4581 point marked on Tuesday. Loose economic policy measures encourages traders who use trading software to choose risky assets for trading.

The unexpectedly low PMI report added to a mixed results of U.S. data released Wednesday, including an improved second-quarter U.S. GDP report, but disappointing U.S. jobless claims, confirming investors' speculations that a sustained economic recovery won't take hold.

The GBP has continued its further falling against other currencies traded on the Forex currency market, unable to shake off the comments by Mervyn King Bank, the Bank of England governor that a weak Pound would be an advantage for the U.K.'s recovery from the global downturn. In today's trading the GBP is at $1.5942 versus the USD.

Today the ministers of finance of EU countries meet in Sweden to discuss further direction of the European economy.

Euro-Zone's Confidence Rises Regardless Problems

Economy and consumer confidence in the euro zone improved for the third consequent month in June. However, the European Commission still fears problems in future. According to a survey by the European Commission, the overall economic-sentiment indicator for the euro zone inclined sharply to a high of 73.3, from 70.2 in May. In the U.K., the Commission's economic-sentiment index grew sharply for 30 percent straight month to 68.8 in June from May's 66.1.

The gains gave ground to think that the European downturn could begin bottoming out. Economic analysts say, the European Central Bank will not change its medium-term view that it should take additional steps to support growth in the euro zone. The ECB's governing council meets on Thursday and is expected to keep unchanged its key interest rate at the same level of 1.0% and also to announce no changes in policy measures to inflate money supply. Many economists warn that improving sentiment should result better performance in output of goods and services.

Wednesday Market Update

European shares finished the day sharply higher, up to 3 percent. Such a rise is explained to be boosted by the following factors: optimistic US information on orders for durable goods increased higher than predicted 1.8 percent, optimistic economic outlook from the OECD.

But the main factor spurring the market trades was the European Central Bank`s credit for banks almost half a trillion euros, the largest investment in its history. So banks turned to be the biggest gainers. Oil prices rose supported by fall in stockpiles of US crude and growing geopolitical conflicts in some OPEC member countries.