Forexpros – The euro rose to a two-week high against the yen on Thursday, as risk appetite found support after a surprise rate cut by China and a successful Spanish bond auction, while investors awaited comments from the Federal Reserve for signs of further easing steps.
EUR/JPY hit 100.47 during European afternoon trade, the pair’s highest since May 23; the pair subsequently consolidated at 100.43, climbing 0.80%.
The pair was likely to find support at 99.35, the low of May 24 and resistance at 101.46, the high of May 23.
Sentiment was boosted after the People’s Bank of China said it will lower benchmark interest rates by 0.25%, effective Friday, in a bid to bolster growth in the world’s second largest economy and alleviate the effects of the global economic slowdown.
The euro also found support earlier after Spain successfully sold EUR2.07 billion of bonds, slightly more than the targeted amount, in an auction which met with solid investor demand, but saw borrowing costs rise.
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.
Meanwhile, investors were looking ahead to Fed Chair Ben Bernanke’s testimony on the U.S. economic outlook before a congressional committee in Washington later in the day, amid speculation that the U.S. central bank is mulling new measures to stimulate growth.
Elsewhere, the yen was lower against the U.S. dollar with USD/JPY advancing 0.66%, to hit 79.71.
Also Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending June 2 fell by 12,000 to a seasonally adjusted 377,000, in line with expectations.
Later in the day, Fed Chairman Ben Bernanke was to appear before the Joint Economic Committee, in Washington.
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