Euro rises vs dollar ahead of ECB bank loan move

AP News

2/28/2012 4:05:33 PM - AP News

The euro rose against the dollar Tuesday a day before the European Central Bank is expected to give banks in the region another round of loans. A jump in U.S. consumer confidence also pushed traders to buy the euro Tuesday.

The central bank made its first round of such loans in late 2011 to insure that European banks continue to lend money and avoid a financial crisis. Economists and traders believe the loans will help ease Europe's debt crisis.

Banks borrowed about $658 billion in December from the ECB. Analysts are expecting banks to borrow around $673 million on Wednesday.

The euro rose to $1.3459 in late trading Tuesday from $1.3399 late Monday.

In the U.S., the Conference Board said its index of consumer confidence rose to 70.8 in February from 61.5 in January. Economists expected an increase to 63.

Traders tend to buy riskier currencies such as the euro when they perceive the global economy to be improving.

In other trading, the British pound rose to $1.5888 from $1.5823. The dollar fell to 0.8954 Swiss franc from 0.8996 Swiss franc and to 99.62 Canadian cents from 99.86 Canadian cents.

The dollar rose to 80.55 Japanese yen from 80.49 yen.