Forexpros – The euro held gains against the U.S. dollar on Monday, trading close to the day’s high after Belgium met its sales target at an auction of government debt and amid hopes for a deal that would halt the spread of the region’s debt crisis.
EUR/USD hit 1.3398 during European afternoon trade, the pair’s highest since Thursday; the pair subsequently consolidated at 1.3357, gaining 0.90%.
The pair was likely to find support at 1.3211, Friday’s low and a seven-week low and resistance at 1.3410, the high of November 24.
Belgium sold EUR2 billion of 10-year bonds in the country’s first debt auction since ratings agency Standard & Poor’s downgraded the country’s rating by one notch on Friday.
Following the auction, Belgium’s benchmark 10-year yield climbed to its highest level since 2000, rising close to 6%.
The euro remained supported by speculation European Union leaders are moving closer to agreeing on a fiscal pact to halt the spread of the region’s debt crisis.
The pact, if agreed, would make budget discipline legally binding and enforceable by European authorities and would give the European Central Bank more scope to undertake large scale bond purchases.
Earlier in the day, Moody’s Investors Service warned that the rapid escalation of the sovereign and banking crisis in the single currency bloc was threatening the credit ratings of all European government bonds.
The euro was also up against the pound, with EUR/GBP rising 0.15% to hit 0.8587.
Also Monday, the GfK group said its index of German consumer climate rose unexpectedly for December, as improved employment figures and higher incomes supported the outlook.
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