The recently battered euro received a boost Wednesday (January 12) as a successful bond action in Portugal was generally considered successful by experts.

Portugal was sold about 1.25 billion euro, or $1.62 billion through a bond auction. The impact of the debt sale should help prevent need for a financial bailout in the near future, which is positive news for the European Union, and the euro.

Also good news was the slightly lower (than that last bond auction in 2010) interest rate of 6.716 per cent that the government will have to pay investors on nine-year bonds. This offset the 5.396 per cent interest rate for three-year bonds, up drastically from October’s 4.041 per cent.

One euro currently gets $1.3019 after trading below $1.29 on Monday. While the news is positive for the euro, its long-term impact on the euro’s value remains to be seen.

A limited bounce for the euro-dollar could serve as a sign that currency traders remain skeptical about the recovery potential for the European Union members relative to that of the United States.

The euro-dollar has traded in a relatively modest range from $1.29 to $1.34 since mid-November. The medium-term trend for the currency pair is negative and a potential retest of June’s 2010 low of $1.1876 could be in store in the next few months.

The British pound is higher against the dollar in unison with the euro. One pound is currently worth $1.5668. The pound has traded in a very tight range from around $1.54 to $1.58 since mid-November.

Oil prices have also moved higher this week coinciding with the gains in the euro and pound. One barrel of light sweet crude oil futures is currently netting a price of $91.27 on the New York NYMEX.

Oil is higher by just $.16 from Tuesday’s settle price, but the price of a barrel is about $3 higher on the week.

Pending news on company earnings, retail sales, the housing market, and other financial markets from the final quarter of 2010 should offer a glimpse of expectations for the US recovery effort, and subsequent dollar movement, as 2011 unfolds.