In a relatively muted session, the major currencies failed to provide a clear trend ahead of the heavy fundamentals, starting on Wednesday with the Dutch 2012 elections and the German Constitutional Court ruling on the European Stability Mechanism (ESM) and the fiscal compact. Moody's credit rating agency poured cold water on the European Central Bank's (ECB) efforts to stabilize the Euro zone with the unlimited bond-purchasing program by highlighting the plan is merely buying time for struggling countries and is not viewed as the final solution for the crisis.
Spain's Prime Minister, Mariano Rajoy stated in a TV interview that the government will not accept any bailout terms that include cuts in pensions or government spending. This increases the odds that Spain will not request financial aid to deal with its debt and I am uncertain the market will appreciate this 'heroic' act of Prime Minister Rajoy.
Mario Draghi lowered Spain's bond yields as he introduced his 'master plan' for the Euro zone, thus reducing the odds even further for Prime Minister Rajoy to request financial aid from the European Commission (EU).
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