Forex Pros – The euro erased losses against the U.S. dollar on Wednesday, edging modestly higher after the Portuguese government successfully sold EUR1 billion of two-year bonds and a report showing that German industrial production accelerated. EUR/USD clawed back up from 1.3856, the daily low, to hit 1.3930 during European early afternoon trade, rising 0.18%. The pair was likely to find support at 1.3742, the low of March 3 and resistance at 1.3988, Tuesday’s high. Portugal’s government debt agency sold the bonds at a yield of 5.9%, up from 4.0% at a similar sale in September. Earlier in the day, the yield on 10-year Portuguese government bonds neared 7.8%, the highest since the launch of the single currency in 1999. The cost of insuring Portuguese debt against non-payment continued to rise after the auction. Elsewhere, official data showed that industrial production in Germany rebounded in January, as construction output improved after the weather-related slump in December. The Federal Ministry of Economics and Technology said industrial production rose 1.8% month-on-month in January, after falling by a revised 0.6% the previous month, surpassing expectations for a 1.7% increase. Meanwhile, the euro was down against the pound, with EUR/GBP shedding 0.19% to hit 0.8586. Also Wednesday, official data showed that the U.K. goods trade deficit contracted sharply in January, recovering from its worst reading on record in December.

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