Forex Pros – The euro extended gains against the pound on Tuesday, climbing to a three-day high after an auction of Spanish government debt met with strong demand, easing concerns that the country may be the next euro zone member to seek a bailout.
EUR/GBP hit 0.8876 during European morning trade, the pair’s highest since April 21; the pair subsequently consolidated at 0.8867, gaining 0.32%.
The pair was likely to find support at 0.8799, Monday’s low and resistance at 0.8922, the high of April 13 and a six-month high.
Earlier in the day, Spain’s Treasury sold EUR1.97 billion of the short-term bills with the average three-month yield jumping to 1.37% compared to 0.89% in March and six-month rates to 1.86% from 1.36%.
Speculation that Greece may have to restructure its debt, denied by officials, and talks on the euro zone’s third bailout in a year in Portugal have pushed up Spain’s refinancing costs and fuelled concerns it may be next.
The euro was also higher against the U.S. dollar, with EUR/USD advancing 0.31% to hit 1.4624.
Later Tuesday the U.S. was to publish reports on house price inflation and consumer confidence, as well as official data on manufacturing activity in Richmond.
ForexPros.com
