Forexpros – The euro held above an 11-month low against the U.S. dollar on Thursday, but the outlook remained dim as fears over the debt crisis in the single currency bloc continued to dampen market sentiment.
EUR/USD pulled back from 1.2956, the daily low, to hit 1.3008 during U.S. morning trade, rising 0.20%.
The pair was likely to find support at 1.2945, Wednesday’s low and an 11-month low and resistance at 1.3064, Wednesday’s high.
The euro found support after an auction of Spanish government debt met with stronger-than-expected investor demand earlier.
Spain’s Treasury sold EUR6 billion of medium-and-long-term bonds, far surpassing a target of EUR3.5 billion.
The country sold EUR2.5 billion of five-year bonds at an average yield of 4.02%, down sharply from 5.27% at a similar auction last month. Spain also auctioned EUR1.4 billion in ten-year bonds at a yield of 5.54%, compared to 6.97% at a November bond sale.
But the euro remained under pressure after the European Central Bank’s monthly report said the debt crisis in the region still posed a substantial threat to the economic outlook.
The report came after data showing that manufacturing activity in the euro zone rose unexpectedly in December, but remained in contraction territory for the fourth consecutive month.
A separate report showed that consumer price inflation in the euro zone remained unchanged at an annualized rate of 3% in December, in line with expectations.
The euro was slightly lower against the pound, with EUR/GBP slipping 0.08% to hit 0.8386.
Also Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week fell to a three-year low of 366,000.
A separate report showed that manufacturing activity in the New York area jumped to a seven-month high.
Meanwhile, official data showed that producer price inflation in the U.S. rose 0.3% in November, broadly in line with expectations.
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