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Forex - EUR/USD steady, focus on Spanish debt woes

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Forexpros - The euro was steady against the U.S. dollar on Wednesday, as Spanish borrowing costs slightly eased while sentiment remained under pressure amid sustained concerns over Madrid's ability to tackle its worsening sovereign debt crisis.

EUR/USD hit 1.3109 during late Asian trade, the daily low; the pair subsequently consolidated at 1.3126, inching down 0.03%.

The pair was likely to find support at 1.3065, the high of April 11 and resistance at 1.3171, the high of April 17.

A Spanish short-term government bond auction briefly reassured investors on Tuesday as the country raised the full targeted amount of EUR3 billion, although borrowing costs almost doubled.

Markets remained jittery however as concerns that Spain's government will not be able to meet deficit reduction targets in the face of a looming recession persisted.

Sentiment was also weak after a flurry of mixed U.S. data on Tuesday failed to paint a reassuring picture of the country's economic recovery.

Official data showed that industrial production in the U.S. was unexpectedly flat for the second consecutive month in March, confounding expectations for a 0.3% increase.

The data came after the U.S. Census Bureau said the number of building permits issued in March rose to 0.747 million, the highest level since September 2008, confounding expectations for a modest decline to 0.710 million.

The report also showed that U.S. housing starts fell unexpectedly in March to hit 0.654 million, the lowest level since October, from a revised 0.694 million units in February.

Elsewhere, the euro was also steady against the pound with EUR/GBP easing 0.05%, to hit 0.8239.

Later in the day, the European Central Bank was to release data on its current account, while the U.S. was to produce government data on crude oil stockpiles.


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