That is likely to check any substantial gains in the euro in the near term. Expectations that the single currency would rally once Spain seeks a rescue package, however, keeping investors from betting against it.
The euro was flat at $1.2945, recovering from a low of $1.2891 on buying by real money investors. Uncertainty about when Madrid would seek financial aid has kept the euro trapped in a range roughly between $1.2800 and $1.3100 since mid-September with option structures below $1.2800 cited.
Euro zone officials said Spain could ask for financial aid from the euro zone next month and if it does the request would likely be dealt with alongside a revised loan programme for Greece and a bailout for Cyprus in one big package. forex
