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Forex - EUR/USD hits session highs after Spain auction

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Investing.com - The euro hit session highs against the U.S. dollar on Thursday, after an auction of Spanish government met with strong investor demand and saw borrowing costs fall.

EUR/USD hit 1.3362 during European morning trade, the pair's highest since Tuesday; the pair subsequently consolidated at 1.3353, gaining 0.49%.

The pair was likely to find support at 1.3269, the session low and resistance at 1.3403, the high of January 14 and an 11-month high.

Spain's Treasury sold EUR4.5 billion worth of debt, in line with the full targeted amount.

Demand was strong, with bids exceeding supply 2.3 times versus a "bid-to-cover" ratio of 2.59 at a previous auction.

The yield on five-year bonds fell to 3.77%, down from 3.99% at a similar auction last week, while the yield on two-year bonds declined to 2.71%, compared to 3.35% at a similar auction last month.

Sentiment on the single currency had improved earlier in the session after a senior European Central Bank policymaker said Wednesday that the situation in the euro zone had stabilized and indicated that the bank was not concerned over the euro's recent gains.

Elsewhere, the International Monetary Fund released Greece's next tranche of bailout aid overnight, averting a default.

The euro hit fresh nine-month highs against the pound, with EUR/GBP rising 0.43% to 0.8337 and re-approached 20-month highs against the yen, with EUR/JPY up 1.33% to 118.99.

Later Thursday, the U.S. was to produce official data on building permits and housing starts, in addition to the weekly government report on initial jobless claims and data on manufacturing activity in Philadelphia.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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