Euro Fluctuates Amid Spanish Bailout Speculation; Aussie Rises
The euro fluctuated against the dollar and yen as investors speculated whether Spain will request aid to contain rising borrowing costs.
The 17-nation currency gained earlier after the Financial Times said Spanish and European Union officials were working on plans to trigger European Central Bank bond purchases to boost Spain’s economy. The Australian dollar led gains among higher- yielding currencies. Canada’s dollar pared gains after a report showed inflation unexpectedly slowed for a second month.
“We’re being driven by rumors and speculation of how close is Spain to seeking a bailout,” said Eric Viloria, senior currency strategist for Gain Capital Group LLC in New York. “It’s a positive thing to the market if Spain asks for a bailout. We’ve heard reports like these so many times in the past, until we hear it from Rajoy you can’t place too much emphasis on it.”
The common European currency added 0.2 percent to $1.2994 at 8:35 a.m. New York time, while bound for a 1.1 percent decline this week. The shared currency rose 0.1 percent to 101.58 yen. Japan’s currency gained 0.1 percent to 78.18 per dollar.
The shared currency has fallen 0.9 percent in the past week versus nine developed-nation currencies tracked by the Bloomberg Correlation-Weighted Indexes. The dollar has gained 0.3 percent and the yen has advanced 0.6 percent.