NEW YORK (CNNMoney.com) -- The dollar slipped versus the euro Wednesday after the European Central Bank said demand for loans was weaker than expected, signaling a brighter outlook for the European banking system.
What prices are doing: The dollar fell 0.3% versus the euro to $1.2225, and it was flat against the Japanese yen at ¥88.62.
Against the British pound, the greenback gained 0.1% to $1.5049 .
On Tuesday, the dollar gained as worries about the global economic outlook rattled markets and investors sought a safe haven.
What's moving the market: The European Central Bank's year-long lending program is set to expire Thursday, and investors have been worried about the repercussions of cutting off funds to banks that have become dependent on the liquidity.
But fears eased slightly Wednesday after an offering of 3-month loans from the ECB was met with less demand than expected, signaling that European banks may not be in as much trouble as investors had previously thought.
The €131.9 billion that 171 banks borrowed from the ECB came in less than the €210 billion analysts had expected the central bank would need to lend, according to a Reuters poll.
"Strong demand would have meant that banks were still leaning heavily on the ECB for life support," Kathy Lien, director of currency research at Global Forex Trading, said in a research note.
"The weaker-than-expected demand for the tender suggests that banks, particularly Spanish ones are not in as bad shape as everyone had feared and that credit is not frozen," she added.
Economy: A report from payroll processor ADP early Wednesday showed that private-sector employers added 13,000 jobs in June.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.79%||3.76%|
|15 yr fixed||3.00%||2.96%|
|30 yr refi||3.77%||3.75%|
|15 yr refi||3.01%||2.98%|
Today's featured rates:
Nike is opening up shop on Amazon.com and the company plans "big shifts" over the coming year. More
The shutdown, which raised protests from navigator groups, will occur from midnight to noon on on all but one Sunday. More
Facebook's board withdrew a proposal that was the subject of a shareholder lawsuit. As a result, the CEO will no longer head to court on Tuesday. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
When you're making big career decisions, you turn to your mentors and your trusted peers. But how do you find these mentors and trusted peers in the first place? More