The sentiment improved with the start of the session today, where the European common currency continues to trade positively for the second consecutive day against the U.S. dollar as optimism spread in the market after the comments made by an ECB official supported the markets to rebound and correct the losses incurred after the negative reaction on Tuesday to the downbeat jobs report from the U.S..
However, the euro reversed to the downside cutting some of the gain recorded during the session today after the downbeat Italian bond auctions, where the Italian Treasury sold as much as 4.88 billion euros of bonds of several maturities on higher borrowing costs, the thing the pressured the euro and prevented it from extending the gains during the session today.
The EUR/USD pair started the session today at $1.3180 and recorded so far the highest at $1.3149 and the lowest at $1.3101, and is currently hovering around 1.3141, fluctuating heavily against the other majors.
Italy sold 2.89 billion euros of 2.5%, three-year bonds on an average yield of 3.89% compared with the previous of 2.76% recorded an auction earlier. Furthermore, demand for the Italian bonds declined slightly to 1.43 times the quantity offered, compared with the previous of 1.56 recorded on March 14.
Italy also auctioned 687 million euros of bonds maturing in February, 2020 on an average yield of 5.04%, while demand was 2.20 times the quantity offered.
The Bank of Italy, which manages the bond sales on behalf of the Italian government, auctioned as well 918 million euros of bonds maturing in August, 2023 on an average yield of 5.57% and a bid-to-cover ratio of 1.75 times the quantity offered.
After the bond auction the euro surrendered some of the gains against the U.S. dollar and declined sharply against the Sterling pound, which hit a three-month high against the common currency, extending the gains recorded against the U.S. dollar for the second consecutive day.
The EUR/GBP started the session at 0.8239 and recorded a high of $0.8252 and a low of 0.8226, and is trading in the moment around 0.8229.