Investing.com - The broadly weaker euro declined against the U.S. dollar in thin post-holiday trade on Wednesday, falling below the key psychological level of 1.30 as lingering fears over the euro zone’s debt crisis continued to dampen sentiment on the single currency.
EUR/USD hit 1.2968 during U.S. morning trade, the lowest since December 15; the pair subsequently consolidated at 1.2989, dropping 0.62%.
The pair was likely to find support at 1.2945, the low of December 14 and an 11-month low and resistance at 1.3082, the previous day’s high.
Trading volumes remained light following the Christmas break, as many traders have closed books before the end of the year, reducing liquidity in the market and increasing volatility.
Italy’s Treasury sold EUR9 billion of six-month bills, at an average yield of 3.25%, down from a record-high 6.50% in a previous auction in November. The country also sold EUR1.73 billion of two-year zero-coupons at a 5% yield.
Following the auction, the yield on Italy’s 10-year bonds eased below the 7% threshold widely seen as unsustainable in the long-term before creeping back higher.
Despite the upbeat results, Thursday’s sale of EUR8.5 billion of long-term Italian debt maturing between 2014 and 2022 was seen as a bigger test of market confidence in the country’s sovereign debt.
Adding to concerns, data released earlier showed that the use of the European Central Bank's overnight deposit facility reached a new, all-time high of EUR452.03 billion on Tuesday.
The figure topped the previous record of EUR411.8 billion set on Tuesday. Heavy use of the deposit facility is seen as a sign of stress in the banking system, reflecting reluctance by banks to lend to each other.
The report added to speculation that the central bank’s three-year loan operation last week did little to strengthen the region’s banking sector.
Elsewhere, the euro was higher against the pound with EUR/GBP gaining 0.34%, to trade at 0.8369.
No major U.S. economic figures are set for release Wednesday, while data set for release during Thursday’s trading session include the latest estimate of weekly jobless claims, a December purchasing-managers index for the Chicago region and November home sales.
EUR/USD hit 1.2968 during U.S. morning trade, the lowest since December 15; the pair subsequently consolidated at 1.2989, dropping 0.62%.
The pair was likely to find support at 1.2945, the low of December 14 and an 11-month low and resistance at 1.3082, the previous day’s high.
Trading volumes remained light following the Christmas break, as many traders have closed books before the end of the year, reducing liquidity in the market and increasing volatility.
Italy’s Treasury sold EUR9 billion of six-month bills, at an average yield of 3.25%, down from a record-high 6.50% in a previous auction in November. The country also sold EUR1.73 billion of two-year zero-coupons at a 5% yield.
Following the auction, the yield on Italy’s 10-year bonds eased below the 7% threshold widely seen as unsustainable in the long-term before creeping back higher.
Despite the upbeat results, Thursday’s sale of EUR8.5 billion of long-term Italian debt maturing between 2014 and 2022 was seen as a bigger test of market confidence in the country’s sovereign debt.
Adding to concerns, data released earlier showed that the use of the European Central Bank's overnight deposit facility reached a new, all-time high of EUR452.03 billion on Tuesday.
The figure topped the previous record of EUR411.8 billion set on Tuesday. Heavy use of the deposit facility is seen as a sign of stress in the banking system, reflecting reluctance by banks to lend to each other.
The report added to speculation that the central bank’s three-year loan operation last week did little to strengthen the region’s banking sector.
Elsewhere, the euro was higher against the pound with EUR/GBP gaining 0.34%, to trade at 0.8369.
No major U.S. economic figures are set for release Wednesday, while data set for release during Thursday’s trading session include the latest estimate of weekly jobless claims, a December purchasing-managers index for the Chicago region and November home sales.