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Deutsche Bank’s Hafeez Sees Euro Declining on Larger-Than-Estimated LTRO

The euro may fall if the region’s financial institutions get more cash than analysts estimate in the European Central Bank’s tender for three-year loans, said Deutsche Bank AG’s head of foreign-exchange strategy.

The central bank will allot cash from its longer-term refinancing operation tomorrow. It probably will provide 470 billion euros ($631 billion) of funds, according to a Bloomberg News survey of analysts.

“If we get a larger-than expected number then I think that would weigh on the euro as it would reflect the fact that the ECB’s balance sheet is expanding,”Bilal Hafeez said in an interview with Linzie Janis on Bloomberg Television’s “Countdown.” Deutsche Bank is the world's biggest foreign- exchange trader.

“If it’s smaller, at one level it should be positive for the euro, it means the ECB’s balance sheet is expanding less,” Singapore-based Hafeez said. “In the longer-term though, it may be more negative for the European growth picture.”

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To contact the editor responsible for this story: Daniel Tilles at

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