Euro Falls Versus Dollar as Spain Delays Bailout Request

The euro declined for a second day against the dollar after Spain’s Prime Minister Mariano Rajoy said his government would delay deciding whether to seek a sovereign bailout until the aid conditions are clear.

Europe’s shared currency approached an eight-week high earlier as Chinese Premier Wen Jiabao pledged to consider European bond purchases and Italy’s borrowing costs fell at an auction. The euro declined versus the yen as Rajoy and French President Francois Hollande pressed the European Central Bank to implement decisions from a June summit to reduce borrowing costs. Norway’s krone rose versus most major peers even after a policy maker signaled the central bank won’t accept persistent currency strength.

“Spain has not requested help, which was something the market had hoped they would do to put the country on a better path to dealing with its debt crisis,” Joe Manimbo, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co. (WU), said in a telephone interview. “This does little to inspire investor confidence. As a result, they’re starting to lighten up on some of their pro-euro bets.”

via Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.