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Forex - EUR/USD up as risk aversion eases, Spain bond auction eyed

Published 03/17/2011, 05:25 AM
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Investing.com – The euro climbed to a daily high against the U.S. dollar on Thursday, as a wave of risk aversion gripping markets subsided, while investors awaited the first euro zone debt auction since an agreement to enlarge the regions bailout fund.

EUR/USD hit 1.3995 during early European trade, the daily high; the pair subsequently consolidated at 1.3992, gaining 0.66%.

The pair was likely to find support at 1.3854, the low of March 15 and resistance at 1.4035, the high of March 7 and a four-month high.

Later Thursday, Spain was to auction as much as EUR4.5 billion of 30-year debt and 10-year securities, the first bond auction since European Union leaders agreed week to increase the lending capacity of the European Financial Stability Facility to the full EUR 440 billion.

Spain, whose credit rating was cut to Aa2 by Moody’s last week, is implementing the deepest austerity measures in at least three decades.

Meanwhile, the euro was lower against the yen, with EUR/JPY dipping 0.08% to hit 110.53.

Earlier in the day, Japanese authorities said they were stepping up efforts to cool reactors at the stricken Fukushima Daiichi nuclear plant, 155 miles north east of Tokyo. Army helicopters dropped sea water on the plant, in a desperate attempt to keep spent fuel rods from over-heating and causing further radiation leaks.

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