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Euro Gains Following Successful Portuguese Bond Auction

January 23, 2013 at 13:53 by Miranda Marquit

20-euro bill and the map of EuropeEuro is gaining against the US dollar today, heading higher as risk appetite makes an appearance on the currency market. Helped along by successful bond auctions in the eurozone’s periphery, the euro is showing some strength. The gains, though, might be threatened by a debt ceiling vote in the United States.

Portugal held a bond auction for the first time since it was bailed out in 2011, and the results were rather favorable. The Treasury aimed to place 2 billion euros, and bids were at around 8 billion. The news of demand for Portuguese bonds follows on the heels of a successful Spanish auction yesterday, and a successful Italian auction last week.

There is optimism that the periphery is on its way to recovery, with the countries seeing strong demand, as well as positioning themselves to qualify for ECB programs that they might need in the future. With so much optimism and demand for yield, the euro is heading higher today.

Threatening to dampen the positive outlook, though, is the upcoming debt ceiling vote in the United States. Risk assets could lose ground if the debt ceiling isn’t raised.

At 13:50 GMT EUR/USD is up to 1.3331 from the open at 1.3323. EUR/GBP is down to 0.8392 fro the open at 0.8411. EUR/JPY is down to 118.0245 from the open at 118.1750.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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