Forexpros – The euro trimmed gains against the U.S. dollar on Thursday, following a moderately successful Spanish government debt auction, as ongoing concerns over the state of the country’s finances persisted.
EUR/USD pulled back from 1.3166, the session high, to hit 1.3138 during European morning trade, still up 0.12% on the day.
The pair was likely to find support at 1.3032, the low of April 9 and resistance at 1.3171, Tuesday’s high.
Spain auctioned EUR1.11 billion of two-year bonds at an average yield of 3.46%, up from 2.06% at a similar auction last month and EUR1.42 billion of 10-year bonds at an average yield of 5.74%, up from 5.33% from a similar auction in March.
The results failed to ease concerns over the outlook for Spain, as Prime Minister Mariano Rajoy’s government attempts to reduce one of the largest deficits in the euro zone, amid fears that the economy is entering a recession.
In addition, worries over Spain’s troubled banking sector weighed, after the country’s central bank said Wednesday that the amount of bad loans at domestic banks rose to an 18-year high in February.
The euro was fractionally lower against the pound, with EUR/GBP dipping 0.06% to hit 0.8185 but remained higher against the broadly weaker yen, with EUR/JPY adding 0.36% to hit 107.02.
The yen was pressured lower by ongoing expectations for further easing measures by the Bank of Japan, after the central bank’s governor reaffirmed a commitment to monetary easing in order to meet Japan’s targeted rate of inflation.
Later in the day, the U.S. was to release official data on unemployment claims, followed by industry data on existing home sales and a report on manufacturing activity in the Philadelphia area.
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