The euro rose against its major counterparts on Wednesday, after Spain's long term treasury auction, and the Bank of England’s (BoE) April policy meeting minutes.
EUR/USD climbed 0.9 pct to hit a sessions high of 1.4471, from 1.4441 before the bond auction. The euro was up 1.2 pct against the Japanese yen at 119.83 yen.
Spanish treasury on Wednesday sold 3.37 billion euro ($4.8 billion) worth of 2021 and 2024 bonds, easing concerns over fiscal stability in the EU peripherals.
The single currency also traded higher against the British pound, to hit a 4-day high of 0.8864 during European morning trade.
The BoE Monetary Policy Committee (MPC) meeting minutes showed that six policymakers voted in favor of maintaining the interest rates at record low of 0.5 percent, while three members voted against the proposition. While Andrew Sentance preferred to increase bank rate by 50 basis points, Spencer Dale and Martin Weale preferred to raise the key lending rate by 25 basis points.
An increase in Bank rate in current circumstances could adversely affect consumer confidence, leading to an exaggerated impact on spending, the minutes said.
However, the policymakers said that there remained a significant risk that inflation would exceed 5 percent in the near term.
In the light of recent developments in the prices of energy, imported commodities and other goods, the near-term path of consumer price index (CPI) inflation was likely to be higher than in the February, the MPC minutes said.
The committee said that indicators of output in the manufacturing and services sectors pointed to reasonably healthy growth. But weak output in the construction and energy sectors was likely to depress GDP growth in the first quarter of 2011, and assessing the outlook for economic activity as a whole was likely to be complicated by the volatility in these sectors.
“Uncertainty around Q1 GDP remains elevated and we continue to expect the MPC to remain on hold until November,” said a note from RBC Capital Markets on Tuesday.