Early trade in New York: Euro bolstered by German data

The euro advanced against the US dollar on Tuesday, on pace for its largest one-day rise in three weeks, boosted by a successful Spanish debt auction and upbeat German business data. But sentiment was fragile and gains could fade. Investors looked to sell into any significant bounce as policymakers' efforts to address the crisis fell short of expectations and European Central Bank chief Mario Draghi dashed hopes of any aggressive support.
The euro extended gains when Spain issued short-term debt at sharply lower costs. Spanish Treasury bull yields plummeted at an auction which saw a spike in demand, allowing Spain's Treasury to sell more than planned. The euro hit a one-week high at $1.31320 on trading platform EBS and was last at $1.31092, up 0.9 percent, on track for its best day since November 11. Key technical resistance for the euro is at $1.31450, an October low, and after that, it's $1.32300, a November 28 trough.