Investing.com – The euro was trading close to a five-week low against the U.S. dollar on Thursday, after Spanish borrowing costs surged to a euro-era high, hovering close to the 7% threshold seen as unsustainable in the long term.
EUR/USD hit 1.3422 during European early afternoon trade, the pair’s lowest since October 10; the pair subsequently consolidated at 1.3464, inching up 0.02%.
The pair was likely to find support at 1.3360, the low of October 10 and resistance at 1.3640, Tuesday’s high.
Spain’s Treasury sold EUR3.56 billion of 10-year bonds at a yield of 6.97% compared with 5.43% when it auctioned debt maturing in April 2021 last month. The bank had set a maximum target of EUR4 billion for the sale.
Meanwhile, France sold EUR3.33 billion of 2016 notes at a yield of 2.82% compared to 2.31% at a similar auction last month, fanning fears over sovereign debt contagion to core euro zone economies.
Following the auction, the European Central Bank resumed purchases of Spanish government debt to support markets and ease pressure on borrowing costs.
German Chancellor Angela Merkel reiterated her opposition to a greater role for the ECB in resolving the region’s debt crisis earlier, saying that only political solutions could solve the euro zone’s problems.
The euro was almost unchanged against the pound, with EUR/GBP dipping 0.03% to hti 0.8551.
Later in the day, the U.S. was to release official data on initial jobless claims, building permits and housing starts and a report on manufacturing activity in the Philadelphia region.
EUR/USD hit 1.3422 during European early afternoon trade, the pair’s lowest since October 10; the pair subsequently consolidated at 1.3464, inching up 0.02%.
The pair was likely to find support at 1.3360, the low of October 10 and resistance at 1.3640, Tuesday’s high.
Spain’s Treasury sold EUR3.56 billion of 10-year bonds at a yield of 6.97% compared with 5.43% when it auctioned debt maturing in April 2021 last month. The bank had set a maximum target of EUR4 billion for the sale.
Meanwhile, France sold EUR3.33 billion of 2016 notes at a yield of 2.82% compared to 2.31% at a similar auction last month, fanning fears over sovereign debt contagion to core euro zone economies.
Following the auction, the European Central Bank resumed purchases of Spanish government debt to support markets and ease pressure on borrowing costs.
German Chancellor Angela Merkel reiterated her opposition to a greater role for the ECB in resolving the region’s debt crisis earlier, saying that only political solutions could solve the euro zone’s problems.
The euro was almost unchanged against the pound, with EUR/GBP dipping 0.03% to hti 0.8551.
Later in the day, the U.S. was to release official data on initial jobless claims, building permits and housing starts and a report on manufacturing activity in the Philadelphia region.