Forex Breaking News –Euro jumps after ECB announces USD based funding for European banks

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The euro jumped across the board at 13:00 GMT , rising 1 percent on the day against the dollar after the European Central Bank announced it would introduce US dollar based funding for European banks.

The ECB, alongside other major central banks will basically reintroduce three-month dollar liquidity tenders in the fourth quarter. It will hold three separate operations between October and December, adding it would help see banks through the year-end period.

“The European Central Bank has decided, in coordination with the (U.S.) Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three US dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year,” the ECB said in a statement.

The ECB’s operations will be conducted on a fixed rate, full allotment basis, and will be held on October 12, November 9 and December 7.

Recently, euro zone banks have experienced renewed strains in finding dollar funding as distrust between banks has grown due to the sovereign debt crisis.

EURUSD jumped from 1.3773 to 1.3935 within 30 minutes of the announcement.