The euro climbed 0.6% against the US dollar today, as strong demand for Spain's government bond issue helped quash recent speculation that the beleaguered country would need to turn to the European Union and International Monetary Fund for aid.

Spain managed to sell €3 billion worth of bonds maturing in 10 years and €479.2 million of 30-year bonds today. Demand for the 10-year issue was 1.89 times greater than the amount on offer, while demand the 30-year debt issue was 2.45 times greater. Although Spain's bond prices rose after the sale, it is still important to note that the 10-year bonds were sold at a yield of 4.864%, nearly 82 basis points higher than the 4.045% yield fetched in a similar bond sale a month earlier. This suggests that it is increasingly becoming more expensive for the country to borrow from the primary bond market. Spain faces debt redemptions of €24.7 billion in July, so today's auction was an important event that conveys that there is strong demand and faith in the country's ability to resolve its structural issues.