The euro was pressured over intraday basis today after the Bank of Spain said that banks borrowing from the ECB in December rose significantly from the previous month confirming the strain on the fragile sector in the depth of the debt crisis.
The Bank of Spain said that banks borrowed 132.4 billion euros from the European Central Banks rising from 106 billion in November and the highest since July 2010 when it set the record 140 billion euros.
The bank also said that borrowing from the ECB's main refinancing operations dropped to 47.1 billion euros from 54.5 billion euros where the decline was merely attributed to the access of longer-term refinancing operations (suggesting the banks preferred the ECB's new 3-year LTRO operation in December) where it jumped to 85.3 billion from 51.8 billion euros.
Investors are still spooked about any news from the Spanish banking sector, where the fiscal imbalances in Spain are not as bad compared to the fragile state of its banking sector, and the high borrowing is merely a reflecting to the tight state of liquidity especially with the high exposure to Spanish debt and other peripheral debt holding.
The news pressures the EUR/USD where it declined from the high set today at $1.2877 to reach to the low of $1.2810 the pair then rebounded to currently trade around $1.2830 areas after the strong reported trade figures as the trade surplus in November widened strongly to 6.1 billion euros on the back of exports surge due to the euro weakness from the previous month of about 3.0%.