LONDON (SHARECAST) - The dollar slipped against the euro on Friday on growing speculation that Spain is moving closer to requesting a bailout from the European Union to ease the nation's debt crisis.
The dollar index, which measures the dollar against a basket of six other currencies, fell to 79.342 from 79.427 on Thursday. For the week the index is up 0.6%.
The dollar fell after a report from the Financial Times said that Spain and European officials are in talks about economic reforms to enable the Eurozone’s fourth-largest country to ask for a bailout in the next month. The newspaper said Spain's package of economic reforms could be outlined as early as next week.
The euro chipped away at earlier gains to trade at $1.2988, still up from $1.2968 on Thursday. Over the week the single currency was down 1%.
The dollar was down against the Japanese yen on Friday at ¥78.13 from ¥78.27 on Thursday after a volatile week after the Bank of Japan expanded its asset-purchase programme.
Sterling rallied to a near 13-month high against the broadly dollar after UK borrowing data came in not as bad as forecast. Reports that Spain may soon ask for financial aid also boosted demand for risk currencies.
Sterling traded at $1.6310, up around 0.5% before later reducing gains to trade at around $1.6271.