Nearly every development in recent days has been embraced by the foreign exchange market as a reason to continue to do what it has been doing since late July, and that is to sell the dollar.

The German Constitutional Court ruling, allowing the European Stability Mechanism to go forward, which in turn bolsters the ECB's Outright Monetary Transaction program, has reduced the extreme tail risk that had been rising after the impact of the Long Term Repo Operations had worn off. It not only reduced peripheral yields, but has also re-opened the bank and corporate bond markets in Europe. The Dutch election results favored pro-European parties. The latest signals suggest that the risks of Greece being ejected from the monetary union has diminished and the odds of a country leaving EMU this year, according to the policy market at Intrade.com have fallen to about 15%, near its lowest level in