After yesterday’s failed bund auction in Germany and the front-page story in the Times on waning Chinese demand for US debt, those concerned that the US will not be able to fund its current debt much-less an additional trillion or so in fiscal stimulus, are in the ascendancy. The euro is garnering the bulk of the demand as the premier dollar-alternative, but this is a bit odd given that it was Europe’s best sovereign credit which couldn’t peddle its paper.

EUR/USD brushed the 1.3800 level before stalling; 1.3840/50 is solid resistance.