Euro Moves Up and Touches 1.2940 as Spain Austerity Bolsters Bailout Prospects

The euro rose for a second day as Spain’s pledge to meet its deficit target spurred prospects it will qualify for an international rescue that will help stem Europe’s debt crisis.

The 17-nation currency headed for a second weekly decline versus its U.S. counterpart before a report today that may confirm France’s economy failed to grow for a third-straight quarter. Economists estimate that data next week will show euro- area manufacturing contracted and unemployment climbed to a record. The Australian dollar strengthened on speculation figures that may show stagnant Chinese manufacturing growth will widen the scope for the nation to add to stimulus measures.

“There is little doubt that at some point Spain is going to have to ask for aid,” said Kymberly Martin, a markets strategist in Wellington at Bank of New Zealand Ltd. “They are just trying to get as much of their own house in order so that they can negotiate the best condition for themselves. It’s genuinely well supported risk-appetite.”

via Bloomberg

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