Euro rise halts as Spain stalls on bailout After a week of cagey trading, the euro remained at a two week high on Friday after the European Central Bank reassured the market it is ready to act when called upon and the US dollar struggled ahead of a crucial employment report. The single currency started the week at $1.2858 against the US dollar but strengthened steadily to trade up 1.2 per cent at $1.3017 on Friday after ECB president Mario Draghi came close to urging European leaders to tap its debt-buying plan on Thursday. The euro has, however, been contained by continuing market confusion about when, or even if, Spain will apply for a bailout and thus allow the ECB to activate its Outright Monetary Transactions tool. It remains 0.9 per cent below its August high of $1.3169. Currencies, generally, have been caught within relatively tight ranges in the absence of clear direction and earlier in the week HSBC strategists went so far as to say that "even if we knew the outcome of future events with certainty, the FX market is not the best place to reflect those views. The dollar index, which weighs the US currency against a basket of leading currencies, was flat ahead of the release of the US non-farm payroll report later on Friday. Analysts suggested the US employment report would dominate markets on Friday and shift the focus back to the dollar. The consensus forecast is for an increase of near 115,000 jobs in September. Adam Cole, head of RBC Capital Markets" G10 FX strategy said that in typical pre-payrolls fashion, G10 ranges have been extraordinarily narrow overnight, particularly in euro-dollar. Or as Citi put it: "Currencies are trading almost exactly where New York left them and only few moments of excitement existed in this otherwise dry session." Citi also argued that the unemployment rate might be a more important driver of FX market reactions on Friday than payrolls alone, and that the most risk positive/ dollar negative outcome was a run-up in the unemployment rate, accompanied by a strong payrolls print, essentially the opposite of last month's release. The Japanese yen climbed marginally against both the euro and the dollar as the Bank of Japan opted not to ease monetary policy despite explicit pressure from Japan's new economic and fiscal policy minister, Seiji Maehara. Mr Maehara became the first government minister to attend a BoJ board meeting since 2003 after saying he wanted the bank to pursue "powerful monetary easing." The BoJ did however repeat its warnings of the effects of a strong yen on the economy. The Japanese currency was up 0.1 per cent against the dollar at Y78.44 and up 0.1 per cent against the euro at Y102.07 on Friday. Nomura still thinks Japan is likely to intervene again if the yen approaches 76 or below against the dollar. Elsewhere the South African rand was the big mover as it lost more than 1.5 per cent against the dollar to a four month low of R8.6855 as reports of escalating industrial unrest in South Africa spooked investors. The rand has now shed near 12 per cent since the start of May when it sat at R7.3500. Benoit Anne at Société Générale is targeting a level of R8.7000 as he expects the domestic picture to become increasingly challenging.