Forexpros – The euro gave up small gains against the U.S. dollar on Thursday, falling to a five-day low after yields at an auction of Italian bonds rose sharply, adding to fears that a second Greek bailout package agreed last week would not be enough to prevent sovereign debt contagion in the euro zone.
EUR/USD pulled back from 1.4399, the daily high, to hit 1.4289 during European early afternoon trade, shedding 0.54%.
The pair was likely to find support at 1.4138, the low of July 21 and resistance at 1.4437, the high of July 22.
Italy auctioned EUR7.97 billion of ten-year bonds at a yield of 5.77%, up from 4.94% at the previous auction in June. Italy also sold EUR3.5 billion of new notes maturing in July 2014, as well as floating-rate debt due in 2015 and 2018.
On Wednesday, Standard & Poor’s cut Greece’s credit rating to CC, two notches above default, saying the country will partially default on its debt once the second bailout package was implemented.
The euro was also lower against the pound, with EUR/GBP shedding 0.53% to hit 0.8750.
Later Thursday, the U.S. was to release government data on unemployment claims and pending home sales, while the House of Representatives was to vote on a proposed plan to raise the U.S. debt ceiling ahead of the August 2 deadline.
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