Forexpros – The Euro surged higher against the U.S. Dollar Friday, marking the largest intraday gain this year, after euro zone leaders eased terms on Spanish loans adding to hopes of an amicable debt crisis solution.
EUR/USD was trading at 1.2580, up 1.08% after striking a low of 1.2433 and a high of 1.2620 on the session
The pair was likely to find support at 1.2408, Thursday’s low, and resistance at 1.2620, today’s high.
Single currency sentiment found support after euro zone leaders agreed at a summit in Brussels that the region’s rescue funds could be used to stabilise bond markets without forcing countries that comply with European Union budget rules to adopt extra austerity measures or economic reforms.
The leaders also agreed that the bloc’s future permanent bailout fund, the European Stability Mechanism (ESM), would be able to lend directly to recapitalize banks without increasing a country’s budget deficit.
Spain’s 10 year bond yield plunged 39 basis points to 6.56%, while Italy’s 10 year yield dropped 42 basis points to 5.78% on the news from the summit. Sterling was lower against the euro with EUR/GBP adding 0.29%, to hit 0.8041.
Later in the day, BoE Governor King was due to speak before the release of the central bank’s financial stability report. The U.K. was also to release a report on consumer confidence.
The U.S. was to release official data on consumer price inflation and personal spending, followed by a report on the purchasing managers’ index in Chicago and revised data from the University of Michigan on consumer sentiment.
Meanwhile, EU leaders are to hold a second day of talks in Brussels.
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