Euro Gains Seen as ECB Bank Test Sparks Repatriation: Currencies
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The euro, which reached a two-year high versus the dollar this month, is poised to extend its gains as the European Central Bank’s audit of the region’s financial system encourages lenders to repatriate overseas assets.
Morgan Stanley says banks will “markedly” reduce net offshore assets that ECB data show rose to a record 613.5 billion euros ($841 billion) on Sept. 30. Royal Bank of Scotland Group Plc sees euro strength as lenders hasten the repayment of central-bank loans to clean up their balance sheets.