The head of the European Central Bank is signaling that the ECB may be ready to offer short-term loans to the monetary union's most at-risk members like Spain and Italy.

Mario Draghi, in a closed session Monday of the European Parliament, said the central bank is open to buying two- and three-year bonds of struggling euro zone members.

Draghi's comments helped boost the value of the euro above $1.26 on Monday, though, by Tuesday morning, it had slipped to just beneath that level. It also helped cut the costs that Italy and Spain must pay to borrow money for two or three years.

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