Investing.com - The euro extended gains against the pound on Thursday, rising to a six-day high after closely watched auctions of Spanish and Italian government debt met with solid investor demand and lower yields.
EUR/GBP hit 0.8322 during European morning trade, the pair’s highest since January 4; the pair subsequently consolidated at 0.8308, gaining 0.24%.
The pair was likely to find support at 0.8239, Wednesday’s low and resistance at 0.8371, the high of January 3.
Spain sold twice the maximum targeted amount of EUR5 billion at auction, selling EUR9.98 billion in bonds maturing in 2015 and 2016, including a new benchmark bond.
The yield on the new benchmark bond, which matures in July 2015, was 3.38%, compared with 5.18% at a similar auction in December.
Meanwhile, Italy auctioned EUR12 billion in short-term debt with yields on five-month bonds at 1.6%, down from 3.25% in December and the yield on 12-month bills falling to 2.73% from 5.95% last month.
Following the auctions, investors turned their attention to the European Central Bank’s policy setting meeting later in the day. The ECB was expected to keep rates unchanged at 1% and was expected to reiterate that governments in the euro zone must step up efforts to tackle the region’s debt crisis.
But concerns over the impact of the region’s debt crisis on the outlook for growth remained after official data showed that industrial production in the euro zone declined for the third consecutive month in November.
Eurostat said industrial production fell by a seasonally adjusted 0.1% in November, compared to expectations for a 0.2% drop, bringing the annualized rate of decline to 0.3%.
In the U.K., official data showed that manufacturing production fell unexpectedly in November, while industrial production also declined unexpectedly.
The euro was also higher against the U.S. dollar, with EUR/USD rising 0.27% to hit 1.2741.
Later in the day, the Bank of England was to announce its benchmark interest rate, while the U.S. was to release official data on retail sales and initial jobless claims.
EUR/GBP hit 0.8322 during European morning trade, the pair’s highest since January 4; the pair subsequently consolidated at 0.8308, gaining 0.24%.
The pair was likely to find support at 0.8239, Wednesday’s low and resistance at 0.8371, the high of January 3.
Spain sold twice the maximum targeted amount of EUR5 billion at auction, selling EUR9.98 billion in bonds maturing in 2015 and 2016, including a new benchmark bond.
The yield on the new benchmark bond, which matures in July 2015, was 3.38%, compared with 5.18% at a similar auction in December.
Meanwhile, Italy auctioned EUR12 billion in short-term debt with yields on five-month bonds at 1.6%, down from 3.25% in December and the yield on 12-month bills falling to 2.73% from 5.95% last month.
Following the auctions, investors turned their attention to the European Central Bank’s policy setting meeting later in the day. The ECB was expected to keep rates unchanged at 1% and was expected to reiterate that governments in the euro zone must step up efforts to tackle the region’s debt crisis.
But concerns over the impact of the region’s debt crisis on the outlook for growth remained after official data showed that industrial production in the euro zone declined for the third consecutive month in November.
Eurostat said industrial production fell by a seasonally adjusted 0.1% in November, compared to expectations for a 0.2% drop, bringing the annualized rate of decline to 0.3%.
In the U.K., official data showed that manufacturing production fell unexpectedly in November, while industrial production also declined unexpectedly.
The euro was also higher against the U.S. dollar, with EUR/USD rising 0.27% to hit 1.2741.
Later in the day, the Bank of England was to announce its benchmark interest rate, while the U.S. was to release official data on retail sales and initial jobless claims.