Two European banks could not get access to funding in US dollars. They had to go to the European Central Bank, which issues euros, not dollars, in their need for cash. They just couldn’t get it from their peers.
The total sum is only $505 million, but this is still worrying. Usually there’s one only bank asking for $500 million. So, it seems that another one joined it with $5 million.
We already had two banks in need for dollars in the past: in mid September, two banks needed $575 million from the ECB. That was after the troika left Greece. So, when fear grips the markets, the fear is also reflected through these reports.
Jean-Pierre Chevallier follows this phenomenon, which might worse as credit conditions worsen due to the recent announcement by Greece to have a referendum to decide upon the recent EU Summit decisions, a referendum seen by some as a referendum on the euro membership.
Bank problems add to the pressure on the common currency. For more on EUR/USD, see the euro dollar forecast.