Investing.com - The euro held steady near a three-and-a-half-year low against the pound on Thursday, as the single currency found some support after Italy saw borrowing costs fall to a two-month low at an auction of short-term government debt earlier.
But gains were limited amid ongoing concerns over the handling of the region’s sovereign debt crisis.
EUR/GBP hit a session high of 0.7907 during European morning trade, before trimming gains to trade at 0.7899, easing up 0.04%.
The pair was expected to find support at 0.7840, Wednesday’s low and the low from November 3, 2008 and resistance at 0.7933, the high from July 10.
The euro found mild support after Italy’s Treasury sold the full targeted amount of EUR7.5 billion worth of 12-month government bonds at an average yield of 2.697%, the lowest since May and down sharply from 3.972% at a similar auction last month.
Meanwhile, official data showed that industrial production in the euro zone rose for the first time in three months in May, increasing by 0.6%. Analysts had expected a modest 0.1% decline.
But sentiment on the euro remained fragile after the European Central Bank’s monthly bulletin reiterated that downside risks have materialized and that growth in the region will remain weak.
Traders also remained jittery after Spanish Prime Minister Mariano Rajoy announced on Wednesday EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners.
Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
Elsewhere, the euro was lower against the U.S. dollar and against the yen, with EUR/USD shedding 0.16% to hit 1.2222 and EUR/JPY down 0.69% to 96.96.
Later in the day, the U.S. was to release government data on unemployment claims and official data on import prices.
But gains were limited amid ongoing concerns over the handling of the region’s sovereign debt crisis.
EUR/GBP hit a session high of 0.7907 during European morning trade, before trimming gains to trade at 0.7899, easing up 0.04%.
The pair was expected to find support at 0.7840, Wednesday’s low and the low from November 3, 2008 and resistance at 0.7933, the high from July 10.
The euro found mild support after Italy’s Treasury sold the full targeted amount of EUR7.5 billion worth of 12-month government bonds at an average yield of 2.697%, the lowest since May and down sharply from 3.972% at a similar auction last month.
Meanwhile, official data showed that industrial production in the euro zone rose for the first time in three months in May, increasing by 0.6%. Analysts had expected a modest 0.1% decline.
But sentiment on the euro remained fragile after the European Central Bank’s monthly bulletin reiterated that downside risks have materialized and that growth in the region will remain weak.
Traders also remained jittery after Spanish Prime Minister Mariano Rajoy announced on Wednesday EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners.
Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
Elsewhere, the euro was lower against the U.S. dollar and against the yen, with EUR/USD shedding 0.16% to hit 1.2222 and EUR/JPY down 0.69% to 96.96.
Later in the day, the U.S. was to release government data on unemployment claims and official data on import prices.