Forexpros – The euro trimmed losses against the U.S. dollar on Thursday, pulling back from the session low after auction of Spanish government met with solid investor demand, but saw the country’s borrowing costs rise.
EUR/USD pulled away from 1.2541, the session low, to hit 1.2574 during European morning trade, still down 0.05% on the day.
The pair was likely to find support at 1.2440, Wednesday’s low and resistance at 1.2623, the high of May 28.
Spain’s Treasury sold slightly more than the targeted amount, successfully auctioning EUR2.07 billion of bonds.
The country sold EUR638 million worth of two-year government bonds at an average yield of 4.33%, up from 3.46% in May, and EUR825 million of four-year debt at an average yield of 5.35%, up from 5.10% at a similar auction last month.
Spain also sold EUR611 million of ten-year debt at an average yield of 6.04%, up from 57% in May.
The yield on Spanish 10-year bonds eased to 6.13% following the auction, down from 6.31% hit on Wednesday.
The auction was viewed as a critical test of investor appetite for the country’s debt, coming just days after Spain warned that it was having difficulty accessing credit markets.
Sentiment on the greenback remained fragile as investors looked ahead to testimony by Federal Reserve Chairman Ben Bernanke on the outlook for the U.S. economy later in the day, amid speculation that the U.S. central bank is mulling new measures to stimulate growth.
The euro was fractionally higher against the pound, with EUR/GBP inching up 0.02% to hit 0.8120 and pushed higher against the yen, with EUR/JPY rising 0.28% to hit 99.89.
Later Thursday, the U.S. was to release government data on initial jobless claims.
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