The euro gained versus the dollar for a second day as speculation persisted that Spain will eventually seek a bailout even after Prime Minister Mariano Rajoy said a request for rescue funds is not imminent.
Andrew Busch, a global currency strategist in Chicago at Bank of Montreal, spoke in a conference call today with investors about the Swiss National Bank’s decision to peg the franc to 1.20 or weaker per euro.
The euro declined for a second day against the dollar after Spain’s Prime Minister Mariano Rajoy said his government would delay deciding whether to seek a sovereign bailout until the aid conditions are clear.
The dollar dropped to an eight-month low against the yen and fell versus the euro as data showed the U.S. lost more jobs in July than forecast, adding to concern the economy may need additional stimulus.
The dollar rose to the highest level against the euro in almost a week after the Federal Reserve refrained from taking further steps to stimulate the world’s largest economy, which might have debased the U.S. currency.
The Dollar Index fell for a second week as Federal Reserve Chairman Ben S. Bernanke defended his unprecedented actions and made the case for further monetary stimulus to counter unemployment of more than 8 percent.
Former Republican House Speaker Newt Gingrich says Barack Obama’s policies are “artificially extending the recession.” Congressman John Boehner , the party’s leader in the House, says “stimulus policies aren’t working.” Republican Senator Jim Bunning calls Federal Reserve Chairman Ben S. Bernanke’s tenure “a failure.”