The currency used in Spain is the euro (€). You can check the current exchange rate with your local currency on the Internet. It is advisable to have about 50-100 euros in cash upon arrival because you may not have immediate access to an exchange office or bank. Any local bank back home can order foreign currency for you with a few days advance notice. Larger metropolitan areas can provide foreign currency without delay.
For your incidental expenses while in Spain
Your budget for incidental expenses will depend on your personal tastes/extravagance. Some students spend excessive amounts on clothes and gifts for friends, whereas others limit their expenditures to more basic items like ice cream, movies, snacks, etc. Given that you have all of your meals included with your homestay, the only real additional expense related to the program would be your transport within the city, or going out at night. As a general rule, you might want to have 100-200 euros of spending money for each week that you plan to be in Spain.