Italian and Spanish bond auctions go badly and the euro is up?

Perfect illustration of my “less bad” currency scenario today. The euro is up 0.33% against the dollar—despite disappointing news from Italian and Spanish bond auctions today—because the U.S. dollar is down—on a “feeling” that the Federal Reserve may say something tomorrow at the end of its two-day meeting that would increase the odds of a new program of quantitative easing.

And now it’s a Dutch crisis?

The Dutch coalition government of Prime Minister Mark Rutte tendered its resignation this morning to Queen Beatrix after the far-right Partij voor de Vrijheid (Freedom Party) of Geert Wilders refused to support plans for 16 billion euros in budget cuts needed to bring the country’s budget for 2013 into alignment with the EuroZone’s 3% budget deficit limit.