Euro Holds Steady; Rajoy Denies Bailout Rumors

The euro held steady at 1.2926 on Wednesday morning as speculation continues about when Spain will request European aid. Tuesday, Spanish Prime Minister Mariano Rajoy denied reports that Madrid was set to ask for a bailout this weekend, and indicated there were no plans to ask for aid near-term. It seems the Spanish government intends on coming through this crisis without help, most still expect a bailout request in the future. Greece's struggle to meet the terms of its past bailout is also making news, as European policy makers debate whether to extend the deadline. This could threaten the value of the euro, as many are speculating that Greece's inability to meet its targets will cause further complication among fragile European economies and lead to a euro zone break up. In a report published Tuesday, Bloomberg voiced the concerns of market analysts who Greece will be the first of many countries to leave the eurozone, possibly within the next year. On Thursday, the European Central Bank is set to meet about interest rates and announce details about its bond buying program. While most predict interest rates to remain constant, data about the European service sector is expected later in the week and it could put pressure on the ECB to lower interest rates. Moody's delayed its rating for Spain, which comes as good news for common currency. Many expected an immediate downgrade; however the rating will remain unchanged until later in the month. A downgrade is still possible though, and would put Spain in “junk” status along with Greece.