NEW YORK Jan 24 The euro extended gains on Thursday, rising two percent against the yen and hitting sessions highs versus the dollar, with traders citing optimism about repayments of cheap three-year loans taken by banks from the European Central Bank just over a year ago.
This suggests that the liquidity crisis that hit euro zone banks a few years ago has eased and is viewed as positive for the euro. Traders said there was broad buying of euros.
Banks took more than 1 trillion euros in the LTRO (long-term refinancing operation) loans from the ECB. A Reuters poll showed traders expected about 100 billion to be paid back next week.
The euro hit a high of 120.43 yen and was last at 120.37 yen, up 2 percent on the day. Against the dollar, the euro hit the day's high of $1.3392 and last changed hands at $1.3385, up 0.5 percent.