The euro rose against the dollar and yen on Friday, but remained within its recent trading range as investors awaited clarity on when and whether heavily indebted Spain would formally request a bailout to shore up its battered finances.
Buying by sovereign investors lifted the single currency earlier in global trade, but the euro looked likely to struggle for traction until answers emerged over a potential Spanish aid request.
A potential bailout request is widely seen as a positive for the euro as it would remove another layer of uncertainty in financial markets and activate the European Central Bank’s bond-buying program aimed at lowering borrowing costs for troubled euro zone economies.
The Spanish economy minister said on Friday a European bond-buying plan was fully ready for use and that there was no political resistance to a bailout request from within the euro zone.
It recovered after the International Monetary Fund said Europe’s heavily indebted countries should be given more time to narrow their deficits.
Data showing output at euro zone factories grew much more than expected in August added to euro’s gains.
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