EU governments may increase the size of the EU bailout fund from the present EUR 440 bln, a recognition that the fund is too small if the crisis spreads to Spain, the Journal reports.
This is one of those good news is bad news scenarios. Yes, a larger backstop is supportive of the notion of arresting the contagion. It also acknowledges the very real possibility that the funds may need to be deployed.
EUR/USD is selling off as the inability to break above 1.2965/90 resistance keeps the down trend intact.
