The European common currency fell against majors, reaching its lowest level in 10 years versus the yen and the lowest since January against the green currency despite the successful bond selling by Italy which witnessed a drop in long-term bills yields.
The yield on the 10-year notes retreated to 6.98% compared with 7.56% in the previous auction while the 2014 bills recorded a drop in yields to 5.62% from 7.89% in Nov. 29 auction.
Yesterday, the Italian Treasury sold 9 billion euros of 179-day bills, where the demand increased to 1.7 times, compared to 1.47 times in the last auction while the borrowing cost retreated to 3.251% from the previous auction's rate of 6.504%.Also, 2013 bills were sold for 1.733 billion euros with a yield of 4.853% from the prior auction's rate of 7.814%.
However, the euro remained affected by yesterday's ECB announcement which showed that the balance sheet rose significantly after the lending to banks the previous week.
The ECB said the balance sheet soared to 2.73 trillion euros, where lending to banks climbed to 879 billion euros in the week ended Dec. 23 on the back of last week's 489 billion euros three-year loans lent to 523 banks.
The announcement raised concerns the ECB will continue its support to banks to avert a financial disaster.
Concerning the EUR/JPY pair, it fell on the daily charts to trade around 100.05 after recording a high of 100.92 and a low of 100.03.
The trading range for the day is expected among the key support at 98.50 and the key resistance at 101.80.
For the dollar, it moved opposite to the euro as investors resorted to the greenback as a refuge.
The dollar index, which tracks the dollar movements versus a basket of major currencies, edged up to high of 80.84 compared with the day's opening level of 80.48.
Later in the day, the U.S. economy will release initial jobless claims for the week ended Dec. 24, where it is predicted to show a rise to 374,000 from the prior reading of 364,000. Also, Chicago purchasing manger is estimated to retreat to 60.4 in Dec. from the previous 62.6, while pending home sales for Nov. will signal 1.5% advance compared with the preceding 10.4% rise.
Moving to the GBP/USD pair, amid the absence of fundamentals from the U.K. and before the release of U.S. data, the pair has followed the general sentiment in the market.
The pair fell on the daily charts to trade around 1.5380 after recording a high of 1.5474 and a low of 1.5359, where the trading range for today is among key support at 1.5180 and key resistance at 1.5680.