Euro Strong After Successful Spanish Bond Auction
The euro climbed upward heading into the weekend after ending a losing streak on Thursday afternoon. The currency reached toward $1.34 at on Friday morning, trading at 1.3389.
Weak data from Germany had investors questioning the strength of the eurozone recovery earlier in the week, but successful bond auctions seemed to overshadow German shortcomings.
Germany has been a driving force for the eurozone's recovery throughout financial crisis. While its neighbors fell victim to spending cuts and failing financial sectors, Germany remained largely unharmed by the crisis. However, data out this week showed that Germany has begun to feel some of the crisis' effects.
Record high unemployment and a decrease in GDP in the fourth quarter gave investors reason to worry that the eurozone as a whole contracted in the final months of 2012 as well. However, with most believing that 2012 was the turning point for the region's financial woes, optimism flooded the market on Friday after struggling economies pulled off successful bond auctions.
According to the Wall Street Journal, Spain was able to sell 4.5 billion euros worth of bonds, highlighting investors' confidence that the country would soon be able to finance itself. Also buoying the euro's value were successful Treasury bill auctions in Ireland and France.
In contrast to the upbeat auctions, economic news painted a much bleaker picture of the region. Unemployment in the Netherlands reached a 10 year high at 7.2 percent, adding to worry that social unrest within the eurozone could pose a problem for its recovery.
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