Investing.com – The euro pared gains against the U.S. dollar on Thursday, pulling back from the session high as ongoing uncertainty over Italy’s political deadlock and financial crisis weighed on sentiment towards the single currency.
EUR/USD pulled away from 1.3653, the session high, to hit 1.3581 during U.S. morning trade, still up 0.29% on the day.
The pair was likely to find support at 1.3483, the days low and resistance at 1.3858, Wednesday’s high.
The euro rose to a session high against the greenback earlier after Italy’s Treasury auctioned EUR5 billion of one-year government bonds at an average yield of 6.08%, the highest since September 1997, but still well below analyst expectations of 7%.
Following the auction, the yield on 10-year Italian bonds fell back below the 7% mark, the level at which Greece, Ireland and Portugal sought international bailouts.
Meanwhile, Italian lawmakers prepared a package of deficit reduction and economic stimulus measures demanded by the European Union, ahead of a vote this weekend.
In Greece, former European Central Bank Vice-President Lucas Papademos was named as Greece’s new interim prime minister, following days of talks amid a scramble to avert an imminent Greek default.
But the outlook for the euro zone remained clouded after the ECB halved its estimate for growth in the single currency bloc next year, saying it now expects the region’s gross domestic product to expand by just 0.8% in 2012, down from a previous forecast of 1.6%.
The euro was also higher against the pound, with EUR/GBP rising 0.21% to hit 0.8527.
Also Thursday, U.S. government data showed that that the number of people who filed for unemployment assistance last week fell to a seven-month low.
The Department of Labor said initial jobless claims for the week ending November 4 fell by 10,000 to a seasonally adjusted 390,000. Analysts had expected jobless claims to hold steady at 400,000.
A separate report showed that the U.S. trade deficit narrowed unexpectedly in September, contracting to USD43.1 billion compared to a deficit of USD44.9 billion the previous month.
Analysts had expected the U.S. trade deficit to widen to USD46.2 billion.
EUR/USD pulled away from 1.3653, the session high, to hit 1.3581 during U.S. morning trade, still up 0.29% on the day.
The pair was likely to find support at 1.3483, the days low and resistance at 1.3858, Wednesday’s high.
The euro rose to a session high against the greenback earlier after Italy’s Treasury auctioned EUR5 billion of one-year government bonds at an average yield of 6.08%, the highest since September 1997, but still well below analyst expectations of 7%.
Following the auction, the yield on 10-year Italian bonds fell back below the 7% mark, the level at which Greece, Ireland and Portugal sought international bailouts.
Meanwhile, Italian lawmakers prepared a package of deficit reduction and economic stimulus measures demanded by the European Union, ahead of a vote this weekend.
In Greece, former European Central Bank Vice-President Lucas Papademos was named as Greece’s new interim prime minister, following days of talks amid a scramble to avert an imminent Greek default.
But the outlook for the euro zone remained clouded after the ECB halved its estimate for growth in the single currency bloc next year, saying it now expects the region’s gross domestic product to expand by just 0.8% in 2012, down from a previous forecast of 1.6%.
The euro was also higher against the pound, with EUR/GBP rising 0.21% to hit 0.8527.
Also Thursday, U.S. government data showed that that the number of people who filed for unemployment assistance last week fell to a seven-month low.
The Department of Labor said initial jobless claims for the week ending November 4 fell by 10,000 to a seasonally adjusted 390,000. Analysts had expected jobless claims to hold steady at 400,000.
A separate report showed that the U.S. trade deficit narrowed unexpectedly in September, contracting to USD43.1 billion compared to a deficit of USD44.9 billion the previous month.
Analysts had expected the U.S. trade deficit to widen to USD46.2 billion.