Forexpros – The euro held gains against the pound on Thursday, as Spain saw borrowing costs rise following an auction of government debt, while negative comments from ratings agency Fitch held the single currency in check.
EUR/GBP hit 0.8356 during European morning trade, the session high; the pair subsequently consolidated at 0.8346, gaining 0.20%.
The pair was likely to find support at 0.8303, Wednesday’s low and resistance at 0.8376, the high of January 13.
Spain auctioned more than the targeted amount of EUR4.5 billion, selling EUR6.6 billion of bonds.
The yield on the four-year bond was 4%, up from 3.9% at the last auction, while yields on the nine and 10-year bond were lower, at 4.5%, down from 5.1% at the previous auction, and 5.4% respectively, against 6.98% in December.
Despite the solid results, the yield on Spanish 10-year bonds climbed after the auction, rising to 5.28% from 5.18% earlier.
France sold EUR8 billion of medium and long term government debt, after Standard & Poor’s downgraded its triple-A rating last week
Elsewhere, Fitch’s said that it expected its ratings review of six euro zone countries would result in downgrades of one to two notches in most cases. The review is set to be completed at the end of January.
The euro also held gains against the U.S. dollar, with EUR/USD up 0.22% to hit 1.2892.
Later Thursday, the U.S. was to publish official data on building reports and housing starts as well as a report on consumer price inflation. The country was also to release government data on unemployment claims and a separate report on manufacturing activity in the Philadelphia area.
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