The euro rose to a one week high against the dollar on Tuesday following speculation that Spain is moving closer to asking for a bailout.

The euro rose to $1.3060, its highest in a week before later trading at $1.3047.
The single currency also rose to a high of ¥103.07 as investors steered clear of the Japanese currency on speculation of more monetary easing from the Bank of Japan and after the recent Softbank deal.

Spain rumours fuelled most of the euro's gains on Tuesday. A formal Spanish aid request would initiate the European Central Bank Spanish bond buying which would lower the nation's borrowing costs. However while reports circulate that Spain is moving closer to a bailout, much uncertainty remains.

The ICE dollar index, which measures the US currency against a basket of six other currencies, fell to 79.370 from 79.710 the previous session as safe haven flows dried up.

The broadly stronger euro bought 81.02p against the pound while sterling rose against the weaker dollar as risk appetite improved. Concern about the weak UK economic outlook and more easing measures from the Bank of England kept gains against the dollar in check.

Against the yen the dollar changed hands at ¥78.91 from ¥78.72 on Monday as speculation mounts that the BoJ will announce further stimulus measures.

The Australian bought $1.0268 from $1.0257 previously.


CJ

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