Demand surges as ECB conducts dollar operation

FRANKFURT (MarketWatch)
The European Central Bank alloted $50.7 billion in three-month dollar loans at a fixed rate of 0.59% and $1.6 billion in seven-day loans at a fixed rate of 0.58% Wednesday in its first dollar-liquidity operations since the ECB joined with the U.S. Federal Reserve and other major central banks last week to announce a cut in dollar swap rates.
A previous dollar operation saw the ECB provide $395 million in three-month loans at a fixed rate of 1.09% on Nov. 10.
The move by the central banks to cut the rate charged for dollar swaps came amid a rise in dollar-funding costs in the interbank market as institutions appeared to hoard cash.