Investing.com – The euro added to gains against the U.S. dollar in thin trade on Tuesday, rallying to a one-week high as a steep decline in Spanish borrowing costs and stronger-than-expected U.S. housing data boosted demand for riskier assets.
EUR/USD hit 1.3132 during U.S. morning trade, the pair’s highest since December 13; the pair subsequently consolidated at 1.3121, jumping 0.92%.
The pair was likely to find support at 1.2992, the days low and resistance at 1.3144, the high of January 12.
The euro extended gains after the U.S. Census Bureau said in a report that building permits rose to the highest level since March 2010 last month, while housing starts climbed to a 19-month high.
Earlier Tuesday, German research institute Ifo said its Business Climate Index rose to a seasonally adjusted 107.2 in December from 106.6 the previous month, confounding expectations for a decline to 106.0.
In addition, Spain saw short-term borrowing costs fall sharply at a well received auction of government debt, easing concerns over the fiscal health of the region’s fourth-largest economy.
Spain’s Treasury sold more than the targeted amount of EUR4.5 billion, auctioning EUR7 billion of three-month bonds at an average yield of 1.73%, down from 5.11% at a similar auction last month.
Meanwhile, EUR1.92 billion of six-month bonds were sold, at an average yield of 2.43%, down from 5.22% in November.
But sentiment on the shared currency remained fragile amid nagging fears over credit ratings downgrades after ratings agency Standard & Poor's placed 15 euro zone nations on negative ratings watch earlier this month.
The euro was lower against the pound, with EUR/GBP shedding 0.25% to hit 0.8365.
Also Tuesday, a report by Gfk showed that an index of Germany's consumer climate was unchanged at 5.6 in December, confounding expectations for a decline to 5.5 as income and economic expectations both improved.
EUR/USD hit 1.3132 during U.S. morning trade, the pair’s highest since December 13; the pair subsequently consolidated at 1.3121, jumping 0.92%.
The pair was likely to find support at 1.2992, the days low and resistance at 1.3144, the high of January 12.
The euro extended gains after the U.S. Census Bureau said in a report that building permits rose to the highest level since March 2010 last month, while housing starts climbed to a 19-month high.
Earlier Tuesday, German research institute Ifo said its Business Climate Index rose to a seasonally adjusted 107.2 in December from 106.6 the previous month, confounding expectations for a decline to 106.0.
In addition, Spain saw short-term borrowing costs fall sharply at a well received auction of government debt, easing concerns over the fiscal health of the region’s fourth-largest economy.
Spain’s Treasury sold more than the targeted amount of EUR4.5 billion, auctioning EUR7 billion of three-month bonds at an average yield of 1.73%, down from 5.11% at a similar auction last month.
Meanwhile, EUR1.92 billion of six-month bonds were sold, at an average yield of 2.43%, down from 5.22% in November.
But sentiment on the shared currency remained fragile amid nagging fears over credit ratings downgrades after ratings agency Standard & Poor's placed 15 euro zone nations on negative ratings watch earlier this month.
The euro was lower against the pound, with EUR/GBP shedding 0.25% to hit 0.8365.
Also Tuesday, a report by Gfk showed that an index of Germany's consumer climate was unchanged at 5.6 in December, confounding expectations for a decline to 5.5 as income and economic expectations both improved.