Forexpros – The euro ticked higher against the U.S. dollar on Thursday, but gains looked likely to be limited ahead of a Spanish government bond auction, which was being viewed as a critical test of investor’s appetite for euro zone sovereign debt.
EUR/USD hit 1.2728 during late Asian trade, the daily high; the pair subsequently consolidated at 1.2714, inching up 0.05%.
The pair was likely to find support at 1.2660, Wednesday’s low and a 16-month trough and resistance at 1.2789, Wednesday’s high.
Later in the day, Spain was to offer up to EUR5 billion of government bonds maturing in 2015 and 2016, while Italy was set to auction as much as EUR4.75 billion of five-year bonds on Friday.
The yield on Spanish 10-year bonds was at 5.36%, while the yield on 10-year Italian government bonds remained just the 7% threshold seen as unsustainable, at 7.04%.
Markets were also jittery ahead of the European Central Bank’s policy setting meeting later Thursday. The ECB was expected to keep rates unchanged at 1% and was expected to reiterate that governments in the euro zone must step up efforts to tackle the region’s debt crisis.
The euro was also fractionally higher against the pound, with EUR/GBP easing up 0.08% to hit 0.8295.
Later Thursday, the U.S. is to release official data on retail sales and initial jobless claims.
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