Amidst the global economic uncertainties, the US dollar advanced from the Euro in the previous European trading session, but gains of the former were limited on speculations that Spain is getting closer to asking for a full-blown bailout from the Euro Zone's bailout fund. Spain is said to be engaging in talks with its partners on new economic reforms that would help the country make a formal request for financial assistance.

The European leaders could not seem to move on and set aside their differences, as in the case of Germany and France over the weekend. Chancellor Angela Merkel and President Francois Hollande highlighted conflicts between the two largest economies in the Euro Zone as they clashed on a timetable to trigger a joint oversight of the currency union's banking sector. Hollande prefers its activation at the earliest possible time. However, Merkel said that financial markets want to see results, and "it has to be thorough, the quality has to be good and then we'll see how long it takes."

It could be recalled that the German Constitutional Court ruled in favor of the European Stability Mechanism, the Euro Zone's bailout fund, on the condition that large countries would be given more votes with regard to making decisions in banking supervision; And during the weekend's summit, Merkel seemed to have made clear Germany's stand on the issue of placing the ECB in charge of supervision of all Euro Zone banks. German Finance Minister Wolfgang Schaeuble already warned last week about rushing ahead with plans to place all Euro Zone banks under the supervision of the ECB. Problems regarding the creation of a banking union are seen to delay a key factor to solve the European crisis. As such, a short position for the EUR/USD pair is recommended in today's European exchanges.

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