Investing.com - The euro was steady against the U.S. dollar on Thursday, after an auction of Italian government bonds saw the country’s borrowing costs rise sharply, as investors looked ahead to U.S. data on inflation and employment later in the day.
EUR/USD hit 1.2588 during European afternoon trade, the session high; the pair subsequently consolidated at 1.2559, inching up 0.03%.
The pair was likely to find support at 1.2441, Tuesday’s low and resistance at 1.2667, Monday’s high and an almost three-week high.
Italy’s Treasury sold the maximum targeted amount of EUR4.5 billion, but the country’s three-year borrowing costs jumped to the highest level since December.
Italy sold EUR3.0 billion of three-year government bonds at an average yield of 5.30%, up sharply from 3.91% at a similar auction last month.
Italy also auctioned EUR837 million of eight-year bonds at an average yield of 6.13%, up from 5.33% previously and EUR627 million of seven-year bonds at an average yield of 6.10%, up from 5.21% in May.
Meanwhile, the yield on Spanish 10-year bonds was at 6.94%, after briefly rising above the critical 7% threshold earlier, a level seen as unsustainable in the long run.
On Wednesday, ratings agency Moody’s cut Spain’s credit rating by three notches to just above junk status and warned that further cuts were possible, fuelling fears over the crisis in the country’s banking sector.
Sentiment on the euro also remained fragile ahead of Sunday’s closely watched general election in Greece, amid fears that a win for anti-bailout parties could precipitate a Greek exit from the euro zone.
The euro was fractionally higher against the pound, with EUR/GBP inching up 0.05% to hit 0.8101 but turned lower against the yen, with EUR/JPY shedding 0.21% to hit 99.58.
Later Thursday, the U.S. was to release official data on consumer price inflation and initial jobless claims.
EUR/USD hit 1.2588 during European afternoon trade, the session high; the pair subsequently consolidated at 1.2559, inching up 0.03%.
The pair was likely to find support at 1.2441, Tuesday’s low and resistance at 1.2667, Monday’s high and an almost three-week high.
Italy’s Treasury sold the maximum targeted amount of EUR4.5 billion, but the country’s three-year borrowing costs jumped to the highest level since December.
Italy sold EUR3.0 billion of three-year government bonds at an average yield of 5.30%, up sharply from 3.91% at a similar auction last month.
Italy also auctioned EUR837 million of eight-year bonds at an average yield of 6.13%, up from 5.33% previously and EUR627 million of seven-year bonds at an average yield of 6.10%, up from 5.21% in May.
Meanwhile, the yield on Spanish 10-year bonds was at 6.94%, after briefly rising above the critical 7% threshold earlier, a level seen as unsustainable in the long run.
On Wednesday, ratings agency Moody’s cut Spain’s credit rating by three notches to just above junk status and warned that further cuts were possible, fuelling fears over the crisis in the country’s banking sector.
Sentiment on the euro also remained fragile ahead of Sunday’s closely watched general election in Greece, amid fears that a win for anti-bailout parties could precipitate a Greek exit from the euro zone.
The euro was fractionally higher against the pound, with EUR/GBP inching up 0.05% to hit 0.8101 but turned lower against the yen, with EUR/JPY shedding 0.21% to hit 99.58.
Later Thursday, the U.S. was to release official data on consumer price inflation and initial jobless claims.