Markets witnessed improvement in the sentiment on Thursday trading, after the bearishness seen yesterday, following successful bonds selling in Italy and Spain that recorded strong demand and drop in yields which boosted risk appetite.
The euro came under pressure yesterday after Fitch dovish comments and Destatis German growth expectations, yet it managed to rebound today after the debt selling.
Spain sold 4.27 billion euros of three-year bonds which saw strong demand as the bid-to-cover ratio was 1.8% and the average yield was 3.384%.
The nation also auctioned 2.5 billion euros of 3.25% bonds due April 30, 2016 at an average yield of 3.74% down from 4.871% the previous action on July 07, and saw strong demand with 2.21 cover ratio, while for 2016 bonds, Spain allotted 3.21 billion with the cover ratio of 1.71 with the average yield of 3.912% down from 4.848% in the November auction.
In Italy, the government met its target and sold 8.5 billion euros of one-year debt at an average yield of 2.735% down from 5.952% at the previous December 12 auction. As for the 136-day bills, the Treasury sold 3.5 billion euros of debt at an average yield of 1.644%.
Concerning the EUR/JPY pair, it rebounded to trade around 98.02 after recording a high of 98.14 and a low of 97.63.
The trading range for the week is expected among the key support at 94.50 and the key resistance at 99.60.
Yet, the pair's movements may witness a change after the announcement of the ECB rate decision which will be followed by a press conference to ECB President Mario Draghi.
Moreover, the dollar index, which tracks the dollar movements versus a basket of major currencies, fell to touch a low of 80.99 compared with the day's starting level of 81.29.
Later in the day, eyes will be on retail sales, initial jobless claims for the week ended Jan. 7 and continuing claims for the week ended Dec. 31 will be available.
Moving to the GBP/USD pair, it rose slightly on the daily charts after the BoE opted to leave both interest rate and APF unchanged this month, in line with median expectations.
The pair is currently hovering around 1.5350 while recording a high of 1.5355 and a low of 1.5277, while the trading range for this week is among key support at 1.5075 and key resistance at 1.5780.