Forex - Euro gains ground despite German ifo slipping

Investing.com - The Euro gained ground against the U.S. Dollar Friday despite a lower German business sentiment index as slowing U.S. manufacturing and home sales weighed on the greenback.

EUR/USD was trading at 1.2550, up 0.11%, trading near the high of the session.

The pair was likely to find support at 1.2520, today’s low, and resistance at 1.2742, Wednesday’s high.

Dampening euro enthusiasm, Germany’s Ifo business climate fell more-than-expected last month, data showed on Friday.

In a report, the Ifo Institute for Economic Research said its index of German business climate fell to 105.3, from 106.9 in the preceding month .

Analysts had expected the index to fall to 105.9 last month.
On Thursday, Spain’s Treasury sold EUR602 million worth of five-year government bonds at an average yield of 6.072% earlier in the day, up sharply from 4.752% at a similar auction last month.

Demand was stronger, however, with bids exceeding supply 3.44 times versus a "bid-to-cover" ratio of 3.14 in May.

Spain also sold EUR918 million of three-year debt at an average yield of 5.547%, up from 4.876% at a similar auction last month. The bid-to-cover ratio stood at 3.18, compared to 3.01 at an auction in May.

The country also auctioned EUR700 million of two-year debt at an average yield of 4.706%, compared to 4.335% at a similar auction last month. The bid-to-cover ratio stood at 3.97, compared to 2.81 at an auction in May.

In total, Spain’s Treasury sold EUR2.22 billion of government debt, above the full targeted amount of EUR2 billion. 

Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.

The yield on Spanish 10-year bonds eased to 6.65% following the auction, down from 6.74% before the results. Yields hit a record high 7.28% on Monday.

U.S. home sales and manufacturing fell more than expected weighing on the Greenback on Thursday

In other news, German Chancellor Angela Merkel, French President Francois Hollande, Itailian Prime Minister Mario Monti and Spanish leader Mariano Rajoy will meet in rome later today to attempt to solve the crisis.

Meanwhile, the Euro was up against the British Pound and against the Japanese Yen, with EUR/GBP easing higher by 0.01% to hit 0.8043 and EUR/JPY rising 0.02% to hit 100.70.