Investing.com - The euro pared back gains against the U.S. dollar on Thursday, after a closely watched auction of Italian government debt met with lackluster investor demand but the single currency remained supported by hopes for further bond buying by the European Central Bank.
EUR/USD pulled back from 1.3149, the session high, to hit 1.3116 during European morning trade, still up 0.06% on the day.
The pair was likely to find support at 1.3065, Wednesday’s low and short-term resistance at 1.3156, Wednesday’s high and an almost one-week high.
Italy auctioned EUR2.88 billion of the EUR3 billion of three-year bonds on offer, at an average yield of 3.89% compared to 2.76% at a similar auction last month, amid persistent concerns over the risk of sovereign debt contagion from Spain.
But the euro remained supported after European Central Bank Executive Board member Benoit Coeure said Wednesday that the central bank still had its bond-buying program available as an option to ease pressure on Spanish bond yields.
He added that the current level of market pressure on Spain was not justified given the reforms being undertaken by its government.
The euro also found support after official data showed that industrial production in the euro zone rose unexpectedly in February, but the year-on-year fall was still the steepest since December 2009.
Eurostat said that industrial production rose to a seasonally adjusted 0.5%, from 0.2% in the preceding month, defying expectations for a 0.3% decline.
Industrial output dropped 1.8% in the year to February, in line with expectations.
The euro was trading close to a three-month low against the pound with EUR/GBP slipping 0.13% to hit 0.8230 and trimmed gains against the yen, with EUR/JPY up 0.30% to hit 106.31, off an earlier high of 106.60.
Later Thursday, the U.S. was to release official data on initial jobless claims, as well as reports on producer price inflation and the trade balance.
EUR/USD pulled back from 1.3149, the session high, to hit 1.3116 during European morning trade, still up 0.06% on the day.
The pair was likely to find support at 1.3065, Wednesday’s low and short-term resistance at 1.3156, Wednesday’s high and an almost one-week high.
Italy auctioned EUR2.88 billion of the EUR3 billion of three-year bonds on offer, at an average yield of 3.89% compared to 2.76% at a similar auction last month, amid persistent concerns over the risk of sovereign debt contagion from Spain.
But the euro remained supported after European Central Bank Executive Board member Benoit Coeure said Wednesday that the central bank still had its bond-buying program available as an option to ease pressure on Spanish bond yields.
He added that the current level of market pressure on Spain was not justified given the reforms being undertaken by its government.
The euro also found support after official data showed that industrial production in the euro zone rose unexpectedly in February, but the year-on-year fall was still the steepest since December 2009.
Eurostat said that industrial production rose to a seasonally adjusted 0.5%, from 0.2% in the preceding month, defying expectations for a 0.3% decline.
Industrial output dropped 1.8% in the year to February, in line with expectations.
The euro was trading close to a three-month low against the pound with EUR/GBP slipping 0.13% to hit 0.8230 and trimmed gains against the yen, with EUR/JPY up 0.30% to hit 106.31, off an earlier high of 106.60.
Later Thursday, the U.S. was to release official data on initial jobless claims, as well as reports on producer price inflation and the trade balance.