Friday, October 19 10:26:01
The euro retreated from the top of its recent trading range against the dollar today as a perceived lack of progress on a Spanish bailout request curbed demand for the single currency.
Expectations Spain will ask for a bailout helped the euro rally to a one-month high this week, but uncertainty about when such a request might come has made investors wary of driving the single currency much higher.
The euro was close to flat on the day at $1.3064, having hit a one-month high of $1.3140 on Wednesday, and holding within the $1.28 to $1.3170 range it has traded in since mid-September. Traders reported bids around $1.3000-1.3020 that could provide support.
"We are missing the decisive news that might push us out of this range. It is most likely going to be some political news like a move from Spain," said Ulrich Leuchtmann, head of FX research at Commerzbank.
European leaders moved closer to establishing a single euro zone banking supervisor at a summit on Thursday, but talked little about the problems facing debt-ridden Spain and Greece. A bailout request from Spain would enable the European Central Bank to buy Spanish bonds and drive down Madrid's borrowing costs. That would probably increase investor appetite for perceived riskier currencies against the safe-haven dollar, such as the euro. (C ) Reuters