BLBG:Dollar Set For Monthly Gain Before U.S. Spending Report
The euro rose toward the most in more than eight weeks against the dollar before Spanish and French leaders meet in Madrid amid speculation Spain is considering seeking a second European bailout.
Europe’s shared currency advanced against all but two of its 16 major peers tracked by Bloomberg as Italy prepared to sell debt. European Central Bank President Mario Draghi said on Aug. 2 the central bank may buy bonds of distressed euro-region nations should those governments ask for aid from the region’s bailout fund. Norway’s krone fell against the euro after Norges Bank Deputy Governor Jan F. Qvigstad signaled that policy makers won’t accept persistent strength in the currency.
“Hollande is meeting Rajoy today and this is the focus for the market,” said Kasper Kirkegaard, a senior currency strategist at Danske Bank A/S (DANSKE) in Copenhagen. “Spain asking for more aid would be euro positive because it would allow the ECB to buy Spanish government bonds and support the market.”
The euro climbed 0.2 percent to $1.2549 at 9:20 a.m. London time, after reaching $1.2590 on Aug. 23, the most since July 4. Europe’s shared currency was little changed at 98.65 yen. It touched 99.18 yen on Aug. 21, the strongest since July 5. The dollar traded at 78.62 yen after gaining 0.3 percent to 78.71 yesterday.
The euro will probably advance to $1.27 over the next three months, Kirkegaard predicted, as policy makers’ actions to stem the turmoil boost demand for the region’s assets.
France’s President Francois Hollande meets Spanish Prime Minister Mariano Rajoy after the Spanish region of Murcia became the third to say it will need emergency loans and Valencia signaled it needs funds, a day after Catalonia said it needed 5 billion euros. The two leaders will hold a joint press conference at about 2:30 p.m. Madrid time.
Norway’s krone slipped 0.1 percent to 7.3019 per euro and was little changed at 5.8187 per dollar.
To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net.
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net.
