Forexpros – The euro pared losses against the U.S. dollar on Thursday, trading within striking distance of a more than one-year low after mixed U.S. data while a weak Italian debt sale added to concerns over the euro zone’s financial woes.
EUR/USD pulled back from 1.2858, the pair’s lowest since September 14, 2010 to hit 1.2911 during U.S. morning trade, still down 0.23%.
The pair was likely to find support at 1.2858, the day’s low and resistance at 1.3049, the high of December 15.
Data showed that U.S. pending home sales rose far more-than-expected in November, surging 7.3% after a 10.3% increase the previous month.
Analysts had expected pending home sales to rise 1.7% in November.
In a separate report, market research group Kingsbury International said its Chicago purchasing managers’ index dipped to 62.5 in December from a reading of 62.6 in November, which was the highest since April.
The data came after the U.S. Department of Labor said earlier that the number of individuals filing for initial jobless benefits in the week ending December 23 rose to 381,000, disappointing expectations for a rise to 370,000.
Despite, the increase claims have fallen below 400,000, a level historically associated with an improving labor market, in seven of the past eight weeks.
The single currency came under strong pressure earlier after Italy’s Treasury sold just over EUR7 billion of long-term debt maturing between 2014 and 2022, below the maximum target of EUR8.5 billion.
The country sold EUR2.5 billion of 10-year bonds, maturing in March 2022, at an average yield of 6.97%, down from November’s euro-record high 7.56%. The country also auctioned EUR2.5 billion of three-year bonds, at an average yield of 5.62%.
Following the auction, the yield on Italy’s 10-year bonds traded at 7.1%, above the critical 7% threshold widely seen as unsustainable in the long-term.
The sale was seen as the first test of European banks’ willingness to purchase long-term sovereign debt of distressed euro zone countries, following last week’s nearly EUR500 billion cash infusion by the European Central Bank.
Elsewhere, the euro was fractionally lower against the pound with EUR/GBP edging down 0.01%, to hit 0.8371.
Later in the day, the U.S. was to release official data on crude oil stockpiles.
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