Forex Trading - Market Update

A little after 5:00 P.M. EST, Moody's released the announcement that they would not be cutting Spain's credit rating to junk. The Euro and risk appetite ripped higher on the news with EUR/USD hitting 1.3100 within 13 minutes of starting the ascent. I think it's important to realize that this latest move up in the Euro has been largely driven by rumors. The fundamentals remain the same, and more importantly, the issues that the speculation is surrounding have not been resolved. Spain has not asked for a bailout, Germany has not agreed to joint debt liability, and political leaders haven't made any new agreements. On top of that, Spain will most likely try and hold off on asking for a bailout as long as it can refinance its debt at a reasonable price. If we don't see Spanish bond yields climbing, they will most likely drag their feet and try and get by until the market eventually forces them to ask for a bailout.