NEW YORK ( BBH FX Strategy) -- The dollar is mixed, with most of the losses coming against the European currencies. The euro made a new high for this move vs. the dollar on Tuesday but so far has been unable to build on it. Support appears to be building for a larger European Financial Stability Facility/European Stability Mechanism firewall ahead of this week's eurozone finance ministers meeting.The Irish referendum is now set for May 31 and the latest polls indicate it will pass. Italy had a well received T-bill auction, but Prime Minister Mario Monti's support is flagging in latest polls and suggests difficulties ahead in pushing through labor reforms. Near-term resistance expected to come in near 1.34 and then 1.348, while support lies around 1.33. Follow TheStreet on Twitter and become a fan on Facebook. Sterling is broadly weaker, declining the most in five weeks against the euro after UK fourth-quarter GDP contracted a worse-than-expected -0.3% quarter over quarter. The dollar is flat against the yen, trading to a recent low of 82.61 before recovering back above the 83 level.
This underscores a major problem for the eurozone. The European Central Bank's Long Term Refinancing Operations have flowed into bonds and helped lift money supply, but it has not reached the end users. This in part is the money multiplier problem, as the high-powered money that the ECB creates is not reaching the real economy. And it's not just the ECB. To differing degrees, the Bank of Japan, the Fed, and the Bank of England are all facing a similar dynamic, though recent U.S. data suggests loan activity is finally picking up. France fourth-quarter GDP revision saw its quarter-over-quarter rate steady at 0.2% but the year-over-year rate lowered to 1.3%. Support seems to be picking up for a larger EFSF/ESM firewall, though numbers being floated (EUR700 billion to EUR940 billion according to one European Union official) are still not large, especially in light of recent press reports suggesting Spain may tap funds for bank rescue (though later rejected by Spain). EU officials are expressing concern about delays in overhauling Spain's banking sector.