FXstreet.com (Barcelona) - Newswires reported that the Spanish government is in talks with EU leaders over the terms of sovereign aid, but no decision is expected before September 12. Reports also suggested that officials are considering a possible option wherein the EFSF can buy Spanish bonds in the primary market and the ECB can operate in the secondary market. EU officials, meanwhile, announced that they are not expecting a Spanish request for aid to come “anytime soon”.
German Finance Minister Schaeuble noted that the EU has already gone to the limits of what is economically viable on Greek aid. He added that the existing programme for Greece must be implemented, cautioning “more time would mean more money and more money would require a new programme”.
“In light of the recent developments and optimism we have revised our 1 month estimates of the EUR/USD target to 1.25 from 1.20.” writes Chris Walker, a Research Analyst at UBS.