Forex Pros – The euro surged to a four-month high against the broadly weaker U.S. dollar on Thursday, after Spain successfully auctioned the maximum amount of bonds planned in the first euro zone debt auction since an agreement to enlarge the regions bailout fund.
EUR/USD hit 1.4053 during European morning trade, the pair’s highest since November 8; the pair subsequently consolidated at 1.4023, surging 0.87%.
The pair was likely to find support at 1.3854, the low of March 15 and resistance at 1.4248, the high of November 5.
Spain’s Treasury sold the bonds at an average yield of 4.5%, up from 3.5% at the previous auction in November but lower than the prevailing level of around 4.6% in the secondary market at the time of the auction.
The auction was viewed as a key test of sentiment as it was the first sale of government debt since European Union leaders agreed last week to increase the lending capacity of the European Financial Stability Facility to the full EUR 440 billion.
Spain, whose credit rating was cut to Aa2 by Moody’s last week, is implementing the deepest austerity measures in at least three decades.
Meanwhile, the euro was down against the yen, with EUR/JPY shedding 0.40% to hit 110.16.
Japanese authorities said they were stepping up efforts to cool reactors at the stricken Fukushima Daiichi nuclear plant, 155 miles north east of Tokyo. Army helicopters dropped sea water on the plant, in a desperate attempt to keep spent fuel rods from over-heating and causing further radiation leaks.
ForexPros.com
