Once again, there are rumors that a Spanish bailout is imminent. The news is sending the euro higher, particularly against the US dollar.
According to a story in the Wall Street Journal, a high-placed Spanish official is claiming that the embattled country is on the verge of formally asking for a bailout. The article also indicates that rather than receiving a straight bailout, Spain could end up with a line of credit. That way, Spain could draw on it if needed — but let it sit untapped otherwise.
The news has many sighing with relief. Concerns that Spain would put off the inevitable for longer, trying to avoid the austerity requirements attached to a bailout, were weighing a bit on the euro. Now, though, the 17-nation currency is moving above 1.30 against the US dollar and testing its strength.
Eurozone still has plenty of problems, though. If the Spanish hurdle is successfully cleared, euro could get even more help. However, for the long-term the eurozone might need to make some fundamental changes to its relationships. For now, though, there is plenty of optimism as the euro makes solid gains.
At 13:01 GMT EUR/USD is up to 1.3048 from the open at 1.2948. EUR/GBP is up to 0.8094 from the open at 0.8056. EUR/JPY is up to 102.9750 from the open at101.8315.
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