The Euro strengthened throughout the European morning as risk sentiment in the periphery bond market was positive following good auctions in Italy and Spain.

From Financial Times: Spain's treasury sold €4.3bn of a new three-year notes at an average yield of 3.384 per cent, down from 5.187 per cent the last time debt with a similar maturity was sold in December. Bid-to-cover ratio for the sale was 1.8 times. The treasury also sold €5.7bn worth of debt maturing in April and October 2016 at lower yields than a similar sale in November.

Italy sold €8.5bn of one-year bills, at an average yield of 2.735 per cent, less than half the cost incurred when Italy last sold similar bills in mid-December. At that auction, Italy was forced to pay a punitive 5.95 per cent to borrow for 12 months. Italy also sold €3.5bn of 136-day bills at a yield of 1.64 per cent.

The Italian 10-year yield fell quite sharply, down to 6.58% as of 7:45AM ET.

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After a day in which the Euro was bombarded by weak macro data and other news, it was a good relief that helped the EUR/USD to retrace to near its highs from yesterday at 1.2775.

The ECB held rates steady at 1% as expected, and now we await the press conference with ECB President Mario Draghi.

- Nick Nasad is the Chief Market Analyst at FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.