The euro was trading at $1.2772, down 0.30% on the back of the Spanish bond auction held today.
Also weighing on the common currency was the Organization for Economic Cooperation and Development (OECD) outlook for Spain. According to the Paris-based OECD, Spain’s economy won’t recover next year as government and private-sector funding conditions remain tight. Gross domestic product will contract 0.8% in 2013 after shrinking 1.6% this year.
Spain sold €2.53 billion in bonds at today's auction, beating its target of €2.5 billion. The Bank of Spain reported that the 3-month bills were sold at an average rate of 0.846%, compared with 0.6345% at a similar auction back on 24 April. Demand for bills fell to 3.95 times the amount sold, from 7.61x last month. Six-month bills sold at 1.737%, up from 1.58% last month. Demand also rose, reaching 4.3 times the amount sold compared to 3.25x previously.
On the technical side, EUR/USD looked to have strong support at the $1.2690 level. Traders have been reducing their bets against the common currency in the past couple of days, keeping in mind there may be a slender chance for a Eurozone resolution if EU leaders agree measures to bolster investor confidence in the eurozone in their meeting on Wednesday.