Forexpros – The euro was higher against the U.S. dollar on Thursday, as solid investor demand at auctions of Spanish and French government debt reassured markets, but ongoing concerns over the region’s debt crisis meant gains were limited.
EUR/USD hit 1.3504 during European early afternoon trade, the daily high; the pair subsequently consolidated at 1.3478, gaining 0.23%.
The pair was likely to find support at 1.3319, the low of November 23 and short-term resistance at 1.3532, Wednesday’s high.
Spain’s Treasury auctioned the full targeted amount of EUR3.75 billion of government bonds, while France auctioned EUR4.5 billion of debt.
France sold EUR1.57 billion of 10-year bonds at an average yield of 3.18%, down from 3.22% at a similar auction last month. The average yield on Spain’s five-year bonds was 5.54%, compared with 4.84% in early November.
The auctions were being seen as a major test of investor confidence, coming one day after six major central banks, including the Federal Reserve and the European Central Bank cut the cost of emergency dollar funding for European banks in a coordinated action.
Market sentiment was dented earlier after ECB President Mario Draghi said that downside risks to Europe’s economic outlook have increased.
The euro was also higher against the pound, with EUR/GBP adding 0.24% to hit 0.8584.
Later in the day, the U.S. was to release its weekly report on initial jobless claims, while the Institute of Supply Management was to release data on manufacturing activity.
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